1951-04-09

Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, I wish to table the
report of the court of investigation into the circumstances of the destruction by fire of the S.S. Quebec off Tadoussac on August 14, 1950. Under the provisions of section 551 of the Canada Shipping Act, the Hon. Mr. Justice Fernand Choquette was appointed on August 18, 1950, as commissioner to investigate and report on the circumstances of the loss of the Quebec. He was assisted by two nautical assessors, Captain Antoine Fournier and Captain Jean-Charles Fraser, and by an engineering assessor, Mr. William Percival.
Counsel appeared for the Department of Transport, for Canada Steamship Lines, Limited, and their officers, and for one of the passengers. During the course of the nineteen hearings held in Quebec city, a total of fifty-two witnesses were heard by the court. Over one hundred exhibits were produced in support of the evidence.
Members will recall that on November 21, 1949, the Minister of Trade and Commerce (Mr. Howe) in my absence tabled the report of the formal investigation into the destruction by fire of the S.S. Noronic. Recommendations contained in the Noronic report resulted in the passenger steamships fire protection regulations being made. When these regulations were promulgated I stated that they would be implemented as far as practicable before the opening of the navigation season of 1950. In the case of the Quebec a very earnest effort was made by the owners to comply with these regulations, and the report indicates that there was considerable new equipment installed. However, due to lack of time, it was not possible for the owners to complete certain fireproof bulkheads and sprinkler systems which were required.
A study of the report reveals that the investigation gave ample opportunity for all persons having knowledge of the disaster to give evidence, as well as the officers and crew, and officials of the board of steamship inspection. All relevant documents were
submitted for the examination of the court and I think I may say without fear of contradiction that the investigation was searching, impartial, and thorough.
In his report the commissioner makes the following statement:
In the circumstances as revealed by the evidence, we are of the opinion that the board of steamship inspection and the Minister of Transport gave reasonable interpretation to section 11 of the regulations of 1950 in authorizing, under prescribed conditions, the issue of the certificate of seaworthiness.
Section 111 of the report, entitled "Origin and Cause of Fire", is most enlightening. The owners, in their representations, claimed that the fire was of an incendiary nature, and made available to the court the opinion of a consulting chemist, Mr. Hazen. It was generally conceded that the fire had its origin in the linen closet.
Expert evidence established to the satisfaction of the court that, having regard to the contents of the linen closet, spontaneous combustion was not possible, nor was it possible that the fire could have been caused inadvertently. Counsel for the Department of Transport expressed the opinion that there was strong presumptive evidence that the fire had been voluntarily set, and the court, in concurring, summed up by saying:
Mr. Hazen's evidence, considering the circumstances on which it is based and the circumstances in which the aero-electric fire alarm system did not function, does not leave us any alternative. Failing proof to the contrary, we have to hold that the fire on board the S.S. Quebec which occurred on August 14, 1950, off Tadoussac, was deliberately set by one or several individuals whose identity Is not established.
The procedure followed in formal investigations of this kind is for the Department of Transport to propound certain questions for the opinion of the court. For the information of the house I quote two of the questions and answers which are recorded in the report:
Question:	What was the cause of the loss of the
Quebec, and the loss of life?
Answer: The Quebec was destroyed by fire, and, according to evidence which was not contradicted, fire was set deliberately by one or several persons whose identity has not been established, and the extinction of that fire was jeopardized by the fact that the aero-electric fire-alarm system was deliberately put out of order.
The cause of the loss of lives was asphyxia by carbon monoxide resulting from inhalation of smoke, as well as secondary charring.
Question:	Were the loss of the Quebec and the
loss of life caused or contributed to by the wrongful act or default of the owners, Canada Steamship

S.S.	"Quebec"
Lines, Limited, Montreal; Captain Cyril Hunter Burch, the master, or by any other person or persons?
Answer:	No. There were several individual
faults and omissions on the part of members of the crew to go to stations which were assigned to them; moreover, the lack of fire-fighting qualifications and training of the crew is obvious; but, in view of the nature of the fire and the fact that the aero-electric fire-alarm system was put out of order, the evidence does not permit to say positively and beyond all doubt that these defaults, omissions and insufficiencies contributed to the destruction of the ship and the loss of lives.
The commissioner made some six recommendations, the first having reference to personnel and' the others having reference to equipment. These recommendations will receive the immediate attention of the department.
With the full implementation of the passenger steamships fire protection regulations of 1950, which must be complied with before different types of ships are placed in commission for the season of 1951, the fire protection standards on Canadian vessels will be the highest required in any maritime nation, and the travelling public will be assured of the best possible protection.

On the orders of the day:


Mr. Gordon Graydon (Peel):: Mr. Speaker, I should like to direct a question to the Minister of Transport arising out of his statement with respect to the loss of S.S. Quebec. What progress has been made in establishing the identity of or apprehending the persons who are believed to have been guilty of the sabotage which he has just described?


Lionel Chevrier: That is a matter for the court of justice in the province in which the investigation took place. As I stated a moment ago, the evidence indicated that the fire was of an incendiary nature, and I presume it would be up to the authorities in that area to prosecute the offenders. However, when there is no way of finding out who they are, as stated in the report, I am afraid that I cannot enlighten my hon. friend any further.
(Translation):


Mr. Paul E. Gagnon (Chicoutimi):: I should like to ask the Minister of Transport (Mr. Chevrier) if the board of transport commissioners has not gone beyond its authority in granting a navigation licence to the
S.S.	Quebec although the latter did not have proper fire-fighting equipment as recommended in the report of the investigation into the Noronic fire.


Lionel Chevrier: Mr. Speaker, the board of transport commissioners does not grant navigation permits to any company. This privilege belongs to the Department of Transport. The department had authorized the Canada Steamship Lines to make use of this ship after the company had assured the department that it would implement the recommendations made by the Kellock commission in its report on the Noronic fire, since the company could not carry out all the alterations before the shipping season. Thus, we did grant them a licence and the commissioner, Judge Cho-quette, decided the department was perfectly right in doing so.
(Text):



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)


Mr. Brown (Essex West):: 1.	Did the government, through the Department of Veterans Affairs or otherwise, purchase property at Windsor, known as the Roseland project, veterans land administration?
2.	Did the Department of Veterans Affairs or the veterans land administration subsequently build on the said lands a number of dwellings, and were these lands and dwellings subsequently sold to individual veterans of world war II?
3.	At the time of any such purchase, were investigations made as to taxes or other levies which might form a charge against the said lands?
4.	Were the veterans who purchased the lands and premises from the veterans land administration required to engage solicitors for their own protection, and if not, were they recommended not to engage such solicitors?
5.	Have any claims been made by the municipality in which such lands are situated for any taxes or local improvement levies which were alleged to be owing at the time of the purchase of the said lands by the veterans land administration?
6.	If so, does the government propose to dispute the said claim of the municipality?
7.	Alternatively, has the government taken any action to assume such obligation?


Mr. Mutch:: 1.	Yes; the property was purchased by the director, the Veterans Land Act.
2.	The veterans land administration did build a number of buildings on the said lands, and these have been sold to individual veterans pursuant to the terms of the Veterans Land Act, 1942.
3.	Yes.
4.	The director, the Veterans Land Act, has no authority to require veterans to obtain the services of solicitors for any purpose. The director has no knowledge of any recom-

Questions
mendations made to veterans not to engage solicitors in connection with their purchases of lands under the Veterans Land Act, 1942.
5.	Claims have been made by the municipality of the township of Sandwich West for alleged arrears of taxes dealt with by a plan for the adjustment and reorganization of the debenture and other indebtedness of the municipal corporation dated the 1st of December, 1946, purporting to be implemented by bylaw No. 1207 of the corporation passed on the 22nd of September, 1947, and approved by the department of municipal affairs for the province of Ontario on the 24th of September, 1947, and approved by the Ontario muncipal board on the 9th of July, 1947, which bylaw and plan and all levies purporting to be made thereunder for the years 1945, 1946, 1947 and 1948 were ratified and confirmed by an act of the province of Ontario known as Township of Sandwich West Act, 1949. The director, the Veterans Land Act, has made payments to the municipality equivalent to the taxes for the years 1945 to 1950, inclusive, that might have been levied on the lands concerned had such lands not been owned by the crown; the present claims relate to levies made pursuant to the above proceedings for the year 1948 and subsequent years in relation to lands sold during those years to veterans and others.
6.	No, in view of facts recited in answer to No. 5.
7.	See answers to Nos. 5 and 6.



MARITIME MARSHLAND REHABILITATION

Mr. Kirk (Antigonish-Guysborough):: What amount has been expended each year under the provisions of the Maritime Marshland Rehabilitation Act, to December 31, 1950, in (a) Nova Scotia; (b) New Brunswick; (c) Prince Edward Island, giving the name of each project and the cost of same?
Annapolis
Royal town	
Expenditure Apr. 1/49 to
Mar. 31/50
Colchester County Truro dikeland
park	 307.50
Victoria Diamond
Jubilee	
Isgonish	
Cumberland County
Advocate	
Upper Nappan	
Amherst Point	
Barronsfield	
Digby County Saulnierville	
Hants County Falmouth
great dike...	291.67
Castle
Frederick	
Falmouth
village	
Noel shore	
Newport town	
Seim ah
marsh body	
Scotch village	
Herbert river	
Kings County
Grand Pre_____	899.50
Habitant	
Total


Mr. McCubbin:: (a) Nova Scotia
Expenditure Expenditure Apr. 1/49 Apr. 1/50 to	to
Mar. 31/50 Dec. 30/50
Name of marsh body Annapolis County
Comeau	
$23,024.07	$	106.60Queen Anne ..	361.61	52,409.58Dugau	
17,994.71Woodworth ...	1,642.73	88.00Upper Belleisle	
150.80Dentiballis ...	297.00	41,483.17Ryerson	
69.79Allan river *	
634.70Mount Anne	
921.45Moschelle	
900.30
(b) New Brunswick Name of marsh body Albert County
Upper dike

	$ 2,468.16
Germantown ..	9,639.21
Hopewell Hill.	212.45
Lower
Coverdale	
Middle
Coverdale	
New Horton	
Upper
Coverdale	
Calkins	
West
Coverdale	
332.00 Expenditure Apr. 1/50 to
Dec. 30/50
39,221.29
35,751.85
127.00
416.05
307.11
34,705.54
720.20
6,380.78
37,315.02
449.30
1,497.87
650.25
382.70
396.00
124.85
389.95
62,252.97
3,249.49



$439,429.32 $ 4,577.29 1,780.40 9,788.24 10,560.97 9,753.39 948.10 650.21 6,360.99 333.50 HOUSE OF COMMONS

[Stage Direction]
Questions
Expenditure Expenditure
	Apr. 1/49	Apr. 1/50
	to	to
	Mar. 31/50	Dec. 30/50
Westmorland County		
Tantramar		
west 	3,565.62	3,662.12Allison 	868.10	12,556.55Westcock ....	910.69	43,411.73Taylor	village 	4,987.83	3,527.82Coyle Landry .	634.32	1,370.37Belliveau	village 	1,467.05	903.76Pre d'en Haut.	6,737.02	2,083.97Dorchester ...	11,985.55Dixon island ..	5,896.64Fox creek ....	391.95Beaumont ....	13,465.17Gautreau	village 	2,220.97Memramcook .	5,674.01Aulac 	3,065.88Dock 	1,151.05College bridge.	1,042.80Log lake 	230.50Dover 	471.20Total 	$157,865.13(c) Prince Edward	Island	Queens County	Johnston river.	$15,918.93
and Manitoba under the Prairie Farm Assistance Act because of crop failure in 1950?
2.	In how many cases have requests or applications for payment been denied in each of the said provinces?
Mr. McCubbin:: 1.	As at March 22, 1951
Alberta	 $2,648,093.25
Saskatchewan	 4,743,632.50
Manitoba	 165,666.50
2.	As at March 22, 1951
Alberta	 869
Saskatchewan	 781
Manitoba	 211



PRAIRIE FARM ASSISTANCE-PAYMENTS TO EMERGENCY FUND

Mr. Boisvert:: What amount was paid out each year since 1945 to the prairie farm emergency fund under the Prairie Farm Assistance Act, 1939?


Robert McCubbin: Crop year
1944- 45	 $ 5,385,586.61
1945-	46	
3,426,358.401946-	47	
5,193,807.641947-	48	
5,116,318.201948-	49	
6,628,496.521949-	50	
8,397,054.78



PRAIRIE FARM ASSISTANCE

Mr. Argue:: 1.	On how many acres of cultivated land was prairie farm assistance paid or approved for payment in Alberta, Saskatchewan and Manitoba, because of crop failure in 1950?
2.	How many acres of cultivated land were ineligible within the eligible area because of paragraph (c) subsection 3 of section 3 of the Prairie Farm Assistance Act, in each of the said provinces?


Mr. McCubbin:: 1.	As at March 22, 1951
Acres
Alberta	 3,428,203
Saskatchewan	 7,123,002
Manitoba	 198,092
2. As at March 22, 1951
Acres
Alberta	 42,439
Saskatchewan	 841
Manitoba	 785
PRAIRIE FARM ASSISTANCE Mr. Argue:
1.	What amount was paid or passed on favourably in each of the provinces of Alberta, Saskatchewan tMr. McCubbin.]



CANADIAN ARMY SPECIAL FORCE


Mr. Couriemanche:: 1.	How many soldiers have enlisted in the province of Quebec since the outbreak of the Korean invasion?
2.	Of these enlistments, what is the number of each nationality?
3.	How many Canadian soldiers are there on the Korean battlefields and in Europe?
4.	How many Canadian soldiers are in training at the present time?
5.	How many officers of each nationality are serving with the Canadian forces in the Korean campaign and in Europe?
6.	How many officers of each nationality are with the Canadian forces now in training?


Mr. Blanchelie:: 1.	4,461 soldiers since June 25, 1950.
2.	Records are classified on the basis of Canadians and other British subjects. All are Canadians except nine other British subjects.
3 and 5. In so far as Korea is concerned, it is not in the public interest to give the numbers of men in a theatre of active hostilities. The only officers and men now stationed in Europe are eight officers serving as mili-

Questions



PRAIRIE FARM REHABILITATION AND ASSISTANCE ACTS

Mr. Kirk (Anligonish-Guysborough):: 1.	What amount was paid out each year from inception of policy to date, under the Prairie Farm Rehabilitation Act (a) in Canada as a whole; (b) in each of the prairie provinces?
2.	What amount was paid out each year from inception of policy to date, under the Prairie Farm Assistance Act (a) in Canada as a whole; (b) in each of the prairie provinces?


Mr. McCubbin:: 1. (a) and (b)
Year	Administration	Manitoba	Saskatchewan	Alberta	B.C.	Total1935-36 .	. $ 37,940.58	$ 50,366.13	$ 236,077.40	$ 87,158.68	$ 411,542.791936-37 .	. 32,729.13	76,565.99	662,116.00	188,407.66	959,818.781937-38 .	. 57,093.58	152,873.05	1,398,910.03	245,122.86	1,853,999.521938-39 .	. 118,298.15	338,069.74	2,599,856.97	282,821.65	3,339,046.511939-40 .	. 180,357.81	204,594.10	2,524,380.65	320,824.39	3,230,156.951940-41 .	. 141,489.38	346,898.23	1,635,114.30	223,273.13	2,346,775.041941-42 .	. 134,588.86	217,760.75	1,840,590.71	213,562.97	2,406,503.291942-43 .	. 140,063.11	125,279.96	1,284,319.38	179,692.32	1,729,355.771943-44 .	. 138,713.62	132,449.03	1,321,656.52	218,486.20	1,811,305.271944-45 .	. 188,577.01	185,388.11	1,292,614.31	252,295.50	1,918,874.931945-46 .	. 171,816.46	223,449.63	1,450,917.01	295,644.78	2,141,827.881946-47 .	. 145,490.69	160,654.89	1,450,333.91	549,048.78	2,305,528.271947-48 .	. 163,620.17	143,560.45	1,386,490.00	459,055.23	$99.20	2,152,825.051948-49 .	. 218,431.56	178,336.36	2,045,667.88	544,181.38	2,983,296.271949-50 .	. (Breakdown by provinces	not available)	2,892,075.561950-51 .	. To February 28, 1951	3,177,384.50Total ..	. $1,869,210.11	$2,536,236.42	$21,129,045.07	$4,059,575.53	$99.20	$35,660,315.382. (a) and (b)	1939 ...	$ 905,416.54	7,574,890.68	1,429,708.31	9,910,015.531940 ...	615,109.23	5,603,266.80	504,179.29	6,722,555.321941 ...	36,513.28	12,010,772.42	3,466,120.05	15,513,405.751943 ...	16,685.25	5,037,472.87	2,425,057.59	7,479,215.711944 . . .	163,501.97	2,980,282.58	2,833,762.91	5,977,547.561945 ...	30,148.50	12,541,768.16	4,395,734.38	16,967,651.041946 ...	6,163.50	9,204,820.72	1,620,922.17	10,831,906.391947 ...	490,410.75	13,368,005.75	3,375,088.60	17,233,505.101948 . . .	63,438.75	11,531,228.25	2,542,440.25	14,137,107.251949 . . .	332,454.25	15,373,261.50	6,336,359.25	22,042,075.001950 (February 24)	2,013,200.25	987,656.50$17,233.00	3,018,089.75Total ...	$2,659,842.02 $97,240,970.28 $29,917,029.30$17,233.00$129,833,074.40	Less 1 per cent levy	$48,055,353.00
tary attaches and seven other ranks on their staffs. In addition, there are others who visit European countries from time to time for purposes of training, liaison, giving or obtaining information, et cetera. All of these are Canadian or other British subjects.
4 and 6. 513 officers and 10,365 other ranks in training; all Canadian or other British subjects.
Net payments



$81,777,721.40 HOUSE OF COMMONS

[Stage Direction]
Questions

Mr. While (Middlesex East):: 1.	How many immigrants entered Canada in each of the years 1946 to 1950, inclusive?
2.	What number from (a) the United Kingdom; (b) the United States; (c) the commonwealth countries other than the United Kingdom; (d) continental Europe; (e) Asia; (f) Africa, during each of the above-mentioned years?
3.	What number of immigrants (a) infants to eighteen years of age; (b) eighteen years of age to sixty-five; (c) sixty-five years and over, entered Canada during each of the years 1946 to 1950, inclusive?
4.	What number of people were deported from Canada in each of these years, and how many of each nationality?
5.	How many were deported during each of the said years on account of (a) disease, showing the number in each category; (b) offences, showing the number in each category?
6.	How many Canadians were deported or rejected by the United States in each of these years, and for what reasons, showing the number in each category?
7.	How many immigrants entered Canada during each of the years 1946 to 1950, inclusive, in the following religious groups; (a) Anglican; (b) Baptist; (c) Jewish; (d) Lutheran; (e) Mormon; (f) Presbyterian; (g) Roman Catholic; (h) Salvation Army; (i) United Church; (j) other religious groups; (k) of no stated religion?


Mr. Harris (Grey-Bruce):: 1. Immigration to Canada, by calendar years, for the period 1946 to 1950:
1946 			 71,719
1947 			 64,127
1948 			 125,414
1949 			 95,217
1950 			 73,912
Total	 430,389
2. Immigration to Canada showing Place of Last Permanent Residence, for the Calendar Years 1946-1950.
1946	1947	1948	1949	1950	TotalsUnited Kingdom 	50,516	35,551	42,680	20,780	12,695	162,222United States 	
Commonwealth countries	11,474	9,444	7,393	7,756	7,821	43,888(other than United Kingdom) 	3,606	4,313	5,260	2,036	2,050	17,265Continental Europe 	5,131	13,709	67,754	61,601	47,857	196,052143	267	547	1,075	2,065	4,09769	45	92	82	85	373Others 	780	798	1,688	1,887	1,339	6,49271,719	64,127	125,414	95,217	73,912	430,389
3. There is no break-down available by the age groups mentioned. Departmental statistical tabulation groups persons under eighteen years of age; eighteen to forty-nine inclusive; and fifty years and over. Statement by age groups in accordance with such break-down follows:
Immigration to Canada showing Age Groups, for the Calendar Years, 1946-1950
Age groups	1946	1947	1948	1949	1950	TotalsUnder 18 years	
20,967	12,059	27,237	23,216	19,040	102,51918-49 years	
47,176	44,876	87,590	63,588	47,972	291,20250 years and over	
3,576	7,192	10,587	8,413	6,900	36,668Totals	
71,719	64,127	125,414	95,217	73,912	430,3894.	See statement on following page.*5.	The departmental statistical tabulation does not show the break-down by categories of disease and of offence. The break-down is fourfold, viz., medical, public charges, criminality, and other civil causes as per statement hereunder.
Deportations from Canada, by Causes, for the Calendar Years 1946-1950
Medical 	
Public charges 	
Criminality 	1946 .. 16 .. 10 . . 114 .. 203	1947 33 8 143 184	1948 33 18 120 181	1949 48 27 94 243	1950 46 31 100 210	Totals 176 94 571 1,021.. 343	368	352	412	387	1,8626.	Information not available. 7.	Information not available. [Mr. McCubbin.l	
^Deportations from Canada, by Nationalities, for the Calendar Years 1946-1950
Nationalities 1946	1947	1948	1949	1950Austrian	2	-	-	-	_Belgian	-	3	4	2	3British	163	176	178	202	154Central American 1	-	1	-	1Chinese	17	17	13	1	_Czechoslovakian	-	-	-	1	3Danish	5	4	7	5	3Dutch	9	6	5	19	17Estonian	6	2	-	4	1Finnish	4	9	4	3	1French	6	5	3	3	3German	-	2	3	1	6Greek	6	3	8	6	5Hungarian	1	1	1	1	1Icelandic	-	1	-	_	_Irish Republican	-	-	-	6	2Italian	-	6	5	4	6Japanese	8	1	-	-	_Latvian	2	1	1	2	2Lithuanian	-	_	_	3	Mexican	-	_	-	1	3Norwegian	8	14	15	21	20Polish	3	1	8	17	23Portuguese	-	1	-	1	_Roumanian	1	-	_	2	1Russian	-	1	1	1	4South American	-	4	_	4	4Spanish	3	1	1	2	6Swedish	12	7	11	4	8Turkish	_	_	1	_	United States	83	97	80	92	108Ukrainian	-	_	_	2	Yugoslavian	-	3	1	1	2Others	3	2	1	1	-Totals	343	368	352	412	387



SALES AND EXCISE TAXES, NEWFOUNDLAND, 1949-51

Mr. Browne (St. John's West):: What amount of money was collected in Newfoundland, for (a) sales tax; (b) liquor tax; (c) tobacco tax, during the fiscal years 1949-1950 and 1950-1951?


Mr. McCann:: (a)	1949-50	$1,866,038.79
1950-51 (only first 11 months
figures available)	 1,625,698.99
(b)	(i) Excise duty paid in
1949-50	$	62,035.27
1950-51 (only first 11 months figures available)	$ 115,739.07
(ii) Customs duty (only available by calendar years) 1949	$	52,878.00
1950		$ 401,200.00
1951	(January)	$	48,200.00
Questions
(iii) Excise duty paid on malt used in the production of beer
1949-	50	$ 375,014.08
1950-	51 (only first 11 months
figures available)	$ 437,444.13
(c)	Excise duty Excise taxes
1949- 50	$895,581.07 $919,118.21
1950-	51 (only first 11 months figures
available) ____$832,137.50 $817,686.45



NATIONAL FILM BOARD


Mr. Browne (St. John's West):: 1.	How many copies of the animated cartoon prepared in 1949, entitled "Four Canadian Songs by Canadian Singers," are now in circulation?
2.	Where are they being exhibited?
3.	How much did this cartoon cost to prepare, and what revenue has been received on account of it?
4.	What are the names of the composers of these songs?
5.	Have any other similar cartoons been prepared and distributed by the film board?
6.	If so, what are the particulars?


Mr. Maybank:: 1.	The film board has made no picture entitled "Four Canadian Songs by Canadian Singers".
2,	3, 4, 5 and 6. Answered by No. 1.



MINISTER OF AGRICULTURE


Mr. Argue:: 1.	What are the names of all persons who accompanied the Minister of Agriculture on his recent trip to the United Kingdom?
2.	What was the total cost of this trip to the Canadian government?
3.	What expenses were incurred by (a) the Minister of Agriculture; (b) each official of the Canadian government?


Mr. McCubbin:: 1.	J. H. Wesson, G. S. H. Barton, D. M. Allan.
2.	$2,677.90.
3.	(a) $780;	(b) $748.81-^1. H. Wesson;
$540.46-G. S. H. Barton; $608.63-D. M. Allan.



MILITARY COLLEGES


Mr. Balcer:: 1.	How many cadets entered the military colleges of the Department of National Defence in the years 1948, 1949 and 1950?
2.	How many of the said cadets were from the province of Quebec?
3.	How many of the latter were French-Canadians?
Questions


Mr. Blanchette:: 1.	1948, 185; 1949, 170; 1950, 154.
2.	1948, 38; 1949, 30; 1950, 24.
3.	The racial origin of candidates entered in Canadian services colleges is not recorded. Eligibility is restricted to Canadian citizens or British subjects normally resident in Canada. Fifty-one of ninety-two cadets from Quebec indicate French as their mother tongue.



CANADIAN NAVAL SHIPS


Mr. Balcer:: How many days were spent at sea during 1950 by H.M.C.S. Magnificent, H.M.C.S. Ontario, each destroyer and each frigate, of the Royal Canadian Navy?
3.	On what date was the building of each of the said vessels started, and when will each be completed?
4.	What is the cost of each vessel?


Mr. Mcllraiih:: 1.	Seven at the present time.
2.	Canadian Vickers Limited, Montreal, Que.
Halifax Shipyards Limited, Halifax, N.S.
Burrard Dry Dock Co. Ltd., North Vancouver, B.C. and Victoria, B.C.
Marine Industries Limited, Sorel, Que.
3.	Orders were placed in April and May, 1950, and procurement of necessary materials commenced almost immediately.
4.	$8 million, estimated.


Mr. Blanchette:: Ship
Magnificent . Ontario	
Destroyers
Micmac	
Nootka	
Crescent ....
Huron	
Haida	
Cayuga	
Athabaskan . Sioux	
Frigates
La Hulloise . Swansea . ... St. Stephen . Antigonish . Beacon Hill .
Days at sea -1950
.	152
.	93
47
119
190
194
153
108



DEFENCE PROGRAM


Mr. Knowles:: 1.	Has consideration been given to a travelling exhibition of items needed in the current defence program, so as to enable plants in all parts of Canada to ascertain items which they could produce?
2.	If so, what is the result of such consideration?
3.	If not, will consideration be given thereto?


Mr. Mcllraiih:: 1.	No.
2.	See answer to No. 1.
3.	No further consideration at the present time.



ANTISUBMARINE ESCORT VESSELS

Mr. Balcer:: 1.	How many antisubmarine escort vessels are being built in Canada?
2.	What are the names of the shipbuilding yards where they are being built, and where are the said yards located?



QUESTIONS PASSED AS ORDERS FOR RETURNS


William Joseph Browne: What have been the revenues and expenditures of the Post Office Department in Newfoundland, for the fiscal years 1949-50 and 1950-51?


CIVIL SERVICE SALARY INCREASES
Mr. Knowles:: 1.	Were the recent increases in civil service salaries awarded to all civil servants?
2.	If not, what individuals, groups or classifications were not given the increase, and why?


RAILWAYS
[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Did the Minister of Agriculture bring to the attention of the Minister of Transport my remarks on Friday evening when I asked if the government would consider appointing a transport controller to allocate railway box cars in such manner as to ensure that western grain is moved off the farms by the end of the crop year?


Lionel Chevrier: Yes, the Minister of Agriculture did bring to my attention the remarks made by my hon. friend during the consideration of the estimates of the Minister of Agriculture on Friday. I took the trouble to read the statement made on that occasion by the hon. member, and I am sorry to have to say to him that the statement which he made was misleading and unfair, because the position is not at all as he states it.

When I made a statement in the house on February 19 I indicated that the United States railroads were doing everything in their power to return box cars of Canadian origin to Canada. I stated also on that occasion that no stone would be left unturned to remedy the situation, and that has been the position. Contrary to what my hon. friend said, the position has been bettering itself ever since I made that statement, because of two things: first, because of the action of the United States railroads and, second, because of a committee appointed by the Department of Transport composed of representatives of the lake carriers, the wheat board and the railways of Canada to find ways and means of getting box cars to western Canada as quickly as possible and to those parts of the country where they are most needed.
The facts are that on Friday, April 6, the unfavourable balance of Canadian box cars in the United States had been reduced from a peak of 18,000 to 10,000, a reduction of 8,000 by way of improvement. Further, on that day I saw a letter from the chairman of the wheat board indicating that the situation was bettering itself. To appoint a transport controller at this time would not in my opinion help the situation unless there existed an opposite number to him in the United States. My hon. friend concludes by saying that nothing resulted from the statement made by myself in the house, and that the situation is much worse, but that is a misleading statement. It is far better than it was on February 19. I think if my hon. friend is fair with himself he will take the first opportunity he can to make the necessary correction in Hansard.


Hazen Robert Argue: I think I should have the right, Mr. Speaker, to reply to the minister, in a sentence. I telephoned the bureau of statistics -


Some hon. Members:: Order.


Mr. Speaker:: Order. I cannot allow a debate on this subject at this time, but I think the hon. member for Assiniboia should be allowed to make a statement. He said it would be about one sentence.


Hazen Robert Argue: It is a question of privilege, and I will do it in one sentence. The minister has questioned my statement that things have become worse. I will tell him where I got my information. I got it from the transportation division of the bureau of statistics, and I asked them to give me the very latest available statistics. They told me the latest available statistics were for March 15. Those are the ones I quoted, and my statement stands on the basis of the information that I could obtain.
80709-lilOJ
Inquiries of the Ministry


Lionel Chevrier: Mr. Speaker, what my hon. friend says is probably so, but he forgot one very important thing-that there are many United States box cars in Canada. That is what he forgot to put on Hansard. If he had put those figures on Hansard the house would then have had an accurate picture.


Hazen Robert Argue: I was talking about the net position, and the net position was worse on March 15 than when the minister made the statement in February.


Mr. Diefenbaker:: I should like to ask the
Minister of Transport a supplementary question.. If I may be pardoned for saying so, the record that I received indicated that there were in March 15,000 more Canadian freight cars in the United States than there were United States freight cars in Canada, or twice the ordinary adverse balance. In 1949 the situation was reversed; there were more United States freight cars in Canada. At that time the United States government made a direct appeal to the government of Canada, and action was taken by the government of Canada. I should like to ask the minister whether, having regard to the serious car shortage in western Canada for grain and lumber transport, consideration has been given by the government of Canada to communicating with the United States government for the purpose of having them do something to remedy a situation that is becoming most serious.


Lionel Chevrier: The situation to which my hon. friend refers is due to two main causes. The first is the switchmen's strike in the United States, which interrupted the movement of box cars into Canada. The second is the very serious blizzard that took place in western Canada some weeks ago. If it had not been for those two causes, I think I am safe in saying that the position would have been pretty much as it is each year.
The Minister of Trade and Commerce has already taken action in conjunction with our department to ensure the movement of wheat by lake carriers from the head of the lakes down the St. (Lawrence up until .the 10th or 15th of May. So far as the box car position is concerned, the question of my hon. friend with respect to taking action through the Department of External Affairs is not one for me to dispose of, but it is one to which we have given consideration. Having regard to all the circumstances, we feel in our department that we have done everything we can at this time to deal with the situation. It may be that a transport controller will become necessary in the future. At the moment I say the position is bettering itself; at least
1728	HOUSE OF
Inquiries of the Ministry that is what the chairman of the wheat board states. It has bettered itself in the last few days to the extent of 5,000 cars.


BUTTER AND EGGS
[Stage Direction]
On the orders of the day:
Mr. A. Earl Caiherwood (Haldimand):: I
should like to direct a question to the Minister of Agriculture. Is the minister prepared to make a statement with respect to the decision of the cabinet as to what the support prices will be for butter and eggs? If not, when can we expect an announcement to be made?


Right Hon. J. G. Gardiner (Minister of Agriculture):: The matter has not yet been
discussed by council, the chief reason being that I have still to meet the representatives of the cheese producers of Ontario this week, and after I meet them there will be some discussion of the question.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: Is the Secretary of State for External Affairs in. a position yet to answer the question I asked last Thursday, which was as follows:
Is it the intention of the government to take any official action over the latest rebuke by General MacArthur to the elected representatives of the people?


Hon. L. B. Pearson (Secreiary of Stale for External Affairs):: Mr. Speaker, there may be some statements of General MacArthur which have been controversial in character, but I do not know of any particular statement of the general which could be considered a rebuke to the elected representatives of the people; therefore I am not able to deal with the question.


Mr. Coldwell:: As a supplementary question, has the minister seen the letter that General MacArthur wrote to representative Martin regarding the Korean situation? If so, has he any comment to make on the proposals made by the general in that letter?


Lester Bowles Pearson: Yes, I have seen the letter, and have read it with considerable interest. Our views on the matters contained therein, and other relevant matters, have already been conveyed informally to the United States government, and I do not feel that I should say anything more at this time on the subject.


[Stage Direction]
On the orders of the day:
Major James William Coldwell: I
should like to direct a question to the Secretary of State for External Affairs, having to do with a matter of which I gave him notice last week. In view of the decision of the Indian government not to accept the offer of Canadian wheat with strings attached tying it up to the Colombo plan, will the government consider making an outright gift of low grade wheat to the Indian government?


Lester Bowles Pearson: Mr. Speaker, the position
with regard to this matter is as follows: the Canadian offer of wheat to India under the Colombo plan had no strings attached, nor has India refused our offer. The only wheat now available for export from Canada is of low grade, No. 5 and 6 Manitoba. As this quality is unsuitable for India, where wheat is used directly in the government rationing system, the Indian government has preferred to wait until our next crop year when a better grade may be available.



HOUSING


[Stage Direction]
On the orders of the day:
Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, on Wednesday last the hon. member for Vancouver-Quadra (Mr. Green) asked about the curtailment of construction in the veterans rental housing project at Vancouver, known as Fraserview. The Fraserview project was planned to provide a total of 1,100 houses which were to be constructed in small groups beginning in 1949. Contracts have been awarded for the construction of 606 houses. When tenders were called for the 1951 construction, the prices tendered were substantially above the corporation's estimates and last year's costs. In view of these higher costs, necessitating correspondingly higher rentals, and in view of the increasing difficulty about an orderly flow of building materials, the corporation has postponed the awarding of contracts for the construction of the remaining houses in Fraserview.
Contracts which have been awarded for land services will be completed. Those areas in which the corporation will not now be proceeding with the construction of houses

will be provided with land services to the extent required to give a reasonable level of services to owners of private houses already built in those areas.



ARTS, LETTERS AND SCIENCES INQUIRY AS TO TABLING OF REPORT OF ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinlon):: May I
ask the Prime Minister if he is now in a position to indicate to the house when he expects to be able to table the report of the Massey royal commission on arts, letters and sciences?


Right Hon. L. S. St. Laurent (Prime Minister):: I have not inquired within the last few days. The last information I had was that the printing was expected to be completed about April 20.



CANNED FISH


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: would like to ask the Minister of Trade and Commerce whether the United States defence department has called for tenders on $500,000 worth of canned fish from the province of Prince Edward Island.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I have no information as to any such call for tenders, but I shall make inquiries in the department, and if we have any information I shall be glad to give it to my hon. friend tomorrow.



COST OF LIVING


Hon. Alphonse Fournier (Minister of Public Works) moved: that the house go into committee of supply.


Mr. George A. Drew (Leader of the Opposition):: As I indicated previously, Mr. Speaker, I propose to take advantage of this opportunity to discuss the very rapid rise in the cost of living and the evidence of that rapid rise as contained in the figures issued last week by the dominion bureau of statistics.
I need not enlarge upon the figures themselves; they are in the mind of everyone. The announcement last week of a record increase of 4-5 points in the monthly cost of living index for February, carrying the overall cost of living index to an all-time high of 179-7, simply served to emphasize what
Cost of Living
all Canadian housewives, and in fact Canadians generally, already know. This gave statistical evidence from official government sources of the runaway inflation which is threatening the standard of living of a very large proportion of our people, creating an extremely serious situation for pensioners and others living on small fixed incomes, undermining confidence in many of those long-established investments that are generally regarded by our people as the safest investments, and rendering more difficult the production of those military requirements so vitally needed without delay in our common effort to deal with the defence of freedom.
When this subject was discussed briefly last Thursday there was some tendency on the part of government spokesmen to minimize the necessity for discussion of the matter at this time, and to suggest that because the most recently published figures were for the month of February, and therefore five weeks old, there was no immediate necessity to discuss them. If that argument were followed, this subject would never be discussed; we would never have the figures showing the actual position as of a few days previously. The best we can do is to accept the evidence given us in the form of statistics, which supports what the people generally are finding all too evident in the daily purchase of their household requirements.
My purpose in bringing forward this subject at this time, the earliest moment possible, is not, as was suggested by more than one member on the government side, to repeat in this house figures already issued in the form of statistics. Rather it is to start a debate on this vitally important subject in an effort to impress upon the government the compelling need for immediate and vigorous action to deal with a situation which can have consequences extending far beyond the immediate hardship to many of our people caused by high prices, particularly the extremely high prices of food.
I was interested in the comment of one hon. member last Thursday. He pointed out that in his own area farmers were selling eggs today at a lower figure than six months ago. That may not be the position in every area or with every commodity, but what the hon. member said emphasizes the need for tackling this problem without further delay. The simple truth is that there have been no increases in prices to the farmers which would explain the very great increases in the cost of most of our basic food requirements. Certainly there have been increases, and substantial increases, in some lines. I think it can be clearly demonstrated,	however,	that the	proportionate increase in retail prices has not

Cost of Living
kept step with the increases to the farmers xhemselves. The same is true of most other things which have risen so sharply in price in the last few months. There is nothing in the increased cost of most raw materials or of wages that would explain the very large proportionate increase in the cost of most of the basic requirements of our people in connection with manufactured goods of various kinds.
It is only natural that in the discussion of a subject of this kind there should be some tendency to oversimplify the issue and suggest that one particular remedy or another will solve the whole problem. At no time in this house or outside it have I ever suggested that this problem can be overcome by any one simple solution. On the contrary I have contended that there is no simple solution, that there are many aspects to this problem. What is more, I have said both inside and outside this house that the problem is not one for government alone, but that everyone must play some part in tackling what is the No. 1 domestic problem facing parliament and the people of Canada today.
I should like to refer to words that I used on February 27 last during a broadcast discussion of this subject. I repeat them because I think that the subjects I covered there generally cover the headings under which this problem must be tackled. I quote from what I said at that time:
There are a number of things that we have urged the government to do:
First, substantially reduce all non-defence expenditures by the government.
Second, encourage the production of every line of civilian requirements so that increased production of these things may ease the strain and pressures which cause inflation.
Third, encourage immigration which will bring to our country vigorous people with the skill and character which will make them useful members of the Canadian community.
Fourth, remove all restrictions which will discourage the building of new houses urgently needed for the steady increase of population by our own normal growth and by immigration.
Fifth, take effective steps to make sure we get full value for every dollar spent on defence.
Sixth, restrain inflation through the control of currency by the Bank of Canada, and by other monetary controls available to the bank under the act which gives it its powers.
Seventh, introduce emergency controls immediately to the extent that they are required to deal effectively with the cost of living and inflation.
Those words, Mr. Speaker, followed substantially earlier arguments I had made on this subject in this house and elsewhere. I would point out that we introduced a resolution in similar form to the one I will introduce before I sit down, dealing with this very subject when the house met in special session in August of last year. For that length of
[Mr. Drew.l
time we have been urging the government to take the steps which are available to it, under the powers it has assumed through legislation presented here, to deal with a problem that now causes serious concern, not only to the housewives in their daily purchases of food and other supplies for the home, but also to the government itself in its defence program because of the impact of inflation upon the cost of the defence requirements of this country in the months and years to come.
In the oversimplification to which I have already referred, I have seen some suggestions that I have rested my whole argument on price control. That is not so. I have advocated price controls, and I propose to advocate price controls today. I do, however, repeat what I said before, that the most important and effective way of tackling inflation in the long run is to increase production itself. In that way we will avoid artificial pressures which drive up the prices because of more dollars chasing fewer goods. If and when we can reach the point where we are producing all that we need for military purposes, and at the same time producing everything required to fill the normal demands of civilian needs, then price controls and subsidies, if they should be introduced, or any other devices which interfere with the normal movement of competition in prices, can be removed. But until some of these more normal methods can begin to operate-and that cannot happen overnight-some form of price control, and possibly subsidies on certain essential requirements, become necessary to protect our people against the sudden impact of the tremendous government purchases which military preparations have superimposed over and above the ordinary demands of civilian buying.
The proposition has been simply and cogently stated by one of the most vigorous Canadian opponents of controls of any kind, in these words:
If we have decree from above in respect of production, that is in respect of supply, we must inevitably have decree from above in respect of demand.
That quotation is from an argument against all controls, but I submit, Mr. Speaker, that the logic is absolutely inescapable. The argument put forward in those words cannot be denied. If there is control of production which segregates a substantial proportion of the products of the soil, the factory, the mine or the water, then until there can be a readjustment of production to meet civilian demands through adequate supplies of civilian material, there must be some form of controls at the other end as well.


Mr. Warren:: What would you do-make
the farmers work harder?


George Alexander Drew: If production and supply are
under control, particularly when there has been a diversion of production and supply to military purposes as at present, then until production has been expanded to meet both military and civilian requirements, control of prices and other controls to deal with the results of that diversion and segregation must be introduced to such extent and until such time as production can catch up to money supply, so that normal price competition of a free market will again offer some remission to the overwhelming majority of Canadian consumers.


Ralph Melville Warren: The hon. member did not
answer my question.


George Alexander Drew: I know, Mr. Speaker, that
there is the contention that the best protection of the public-


Ralph Melville Warren: Make the farmers work
harder.


Mr. Speaker:: Order.


George Alexander Drew: -comes from that very play
of prices which will offer to the consumer the opportunity of lower prices as well as higher prices. In normal times when producers are free to produce what they wish to produce, and to produce in such quantity as they believe is wise, then the consumer does benefit from price competition in a free market. That competition-


Ralph Melville Warren: Not now.


George Alexander Drew: You are right-not now. That
competition, through improvement in design or quality, through better selling methods, has over and over again brought down the price of manufactured goods and commodities to the advantage of our people.
At the present time, Mr. Speaker, we are not going to see that free play of prices which will reduce the cost, except in unusual circumstances. There may be unusual circumstances which arise. It is possible that we may see that happen with regard to certain perishable commodities. Right now it looks as if some perishable commodities had been segregated from ordinary demand to a point where the very attempt to increase the price may result in a lower price. But over the broad field of commodities needed by the public, government spending at the present time is creating pressures to increase prices. Consequently I suggest that it is discussing this subject in terms of utter unreality to put forward the proposition that price competition will protect the public at a time like this.
Cost of Living
Surely it is not necessary at this time to emphasize the seriousness of the present situation. It affects everyone. Most of all, however, it affects the large number of Canadians who are living on pensions or small fixed incomes established several years ago when the dollar was worth nearly twice what it is worth today. The inescapable truth is that a large number of Canadians already find themselves in a desperate situation. We are not talking about the future; we are talking about the present. Many people who are in receipt of pensions which were fixed years ago at what was regarded as the bare, decent, subsistence level, have been finding for some time that they cannot meet even their ordinary day to day food requirements after they have paid rent and met the cost of fuel and other necessities. Pensions and incomes regarded as adequate for the rest of their lives will not provide housing, clothing, heat and food at present prices. There is increasing evidence of actual undernourishment in various parts of Canada because of the inability of people to secure the kind of food they need after paying rent and buying clothing and other necessities.
One short statement in a letter from a veteran, who is no crank and no chronic malcontent, indicates the thoughts that are passing through the minds of many of our people. I should like to quote just one paragraph from that letter:
A lot of us would like to die a natural death, or at least not one caused by hardship imposed by the government.
I know that the members of this government individually would be no more anxious than any other Canadian to impose hardship on any of the people. Any argument I put forward is not with the thought that individually any member of this government would disregard the hardship that might be imposed upon the people. I am arguing from the point of view of the people who believe that something should have been done a long time ago, and most certainly should be done now, to protect those who have no means of supplementing their present incomes.
The fact that I would most certainly accord to every member of the government those sentiments toward their fellow Canadians which each one of us shares does not dispose of the fact that people who have been so consistently urged by this government to give the government credit for whatever good times we have should now carry that argument to its present conclusion. If the people who are suffering from inflation blame this government for the plight in which

Cost of Living
many of them are placed today, it is the natural and inevitable consequence of the propaganda this government has put forward with the utmost vigour to convince the people of this country that every good thing was their direct responsibility as well. The statement I have quoted reflects an attitude in the minds of a great many people which can undermine confidence in government as an institution, no matter what that government may be, at a time when respect for government is part of the very struggle in which we are engaged.
As part of the struggle against communism I seek to impress upon the government, and those members who ordinarily support the government, the importance of continuing in the minds of our people confidence in that system which we seek to hold up as an infinitely better system than the communists are imposing upon so many people throughout the world. It is noticeable that in those countries where runaway inflation destroyed the savings of the people, wiped out the value of their insurance certificates- took away the savings which they had accumulated for their old age-there is today the highest support for the communist party, in those countries which are still free and still have democratic governments. One of the very reasons why in Italy and France, countries with great traditions of free government, there are so many people supporting the communist party is that so many of their people have lost what they thought was going to give them security; therefore they have lost confidence in a system of that kind, and those who live in the same houses, those brought up with them, their children and their grandchildren, have reason for concern about it.
It is not only the old people, the cripples, the blind and those who cannot earn money in the ordinary way who are affected by the effect of inflation upon pensions and fixed incomes. It is all the others who look ahead and ask themselves what their own future is under the system that we are doing so much to preserve. To people who feel that way it is no answer that they be told, as we were told by the Minister of Finance last Thursday, that what is happening here is simply part of a world-wide phenomenon. The hundreds of thousands of Canadians who are having the utmost difficulty in making ends meet are not greatly interested in whether or not it is a world-wide phenomenon. What they want to know is what is going to happen to them right here in Canada. What they want is action in Canada to deal with our own problems, and they want it

now. That, Mr. Speaker, is the reason why I will move an amendment to the motion to go into supply.
After all, I suggest that the test of the effectiveness and humanity of any society is the security we offer to our people in their declining years; and most important to the future of our country is the education and opportunity we offer to our youth.
Let me for a few moments deal with that aspect of the problem in its present state. From all across Canada we are being told by educational leaders that education in this country is threatened by the inability of local school boards and educational institutions to pay teachers a sufficient salary to enable them to meet their daily requirements, in the meeting of which they are confronted by the greatly increased cost of living. We are told by these educational leaders that inflation is threatening our whole educational system, and particularly the opportunities to give that higher education upon which the development, expansion and prosperity of this great country must depend in the years ahead.
In varying degrees inflation already presents an extremely serious problem to every Canadian householder. I have already referred to the problem which confronts the pensioners and others on small fixed incomes. We must think also of the demands of the young men and women starting out in life and seeking to lay the foundation of all society, the home. Let us think of what inflation does to the cost of the house itself. Let us also think of what it means to the cost of furnishing that house; and let us not forget that usually young people who are considering marriage are not in high income brackets, and they must have some regard to the possibility of their being able to meet the special demands of early married life, after paying the prices that must be paid for all their basic requirements.
Young people who are already married or contemplating marriage will not be greatly impressed by new taxation as a method of controlling inflation, when they find the present taxation serious enough as it is. Now is the time to say, in no uncertain terms, that to a great many people increased taxation, far from being anti-inflationary, is going to be the most inflationary thing that could possibly happen. To a considerable part of our population, and particularly to the young people, where the impact of inflation is felt all along the line, added taxes can be just as inflationary as shortage of supplies. This point is very well put forward in the Observer, of Hartland, New Brunswick, in its issue of April 5. I quote this wise observation:
A serious impediment to marriage nowadays is the increasing difficulty of supporting the government and a wife at the same time.

These words, Mr. Speaker, which reflect the wisdom of the hon. member of this house who has some responsibility for their publication, come directly to the serious problem that is confronting the young people of today who contemplate building a home. When they have to consider what they are going to pay in taxes, when they consider the rising cost of living, those who approach this extremely important matter with any measure of cool judgment must have some concern about their ability to establish what is really the basis of our society.
It is not necessary to enlarge upon all the difficulties caused by inflation. The consequences are being felt on all sides. It is true that it is a world-wide problem. I suggest, however, that it is not a phenomenon; it is in fact a perfectly simple result from a situation which has been analysed over and over again in the past. In varying degrees this same problem is being faced in all free countries which are now compelled to devote such a large part of their national income to defence production. There is nothing mysterious or unexpected about it. Once the urgent duty of any nation is suddenly to build up its defences and, for that purpose, to divert a considerable part of its resources and manpower, one danger above all others presents itself in the domestic field, and that is the danger of inflation.
No form of production and no diversion of human effort is so largely calculated to create demands beyond the limits of supply. On the one hand there is the withdrawal from active productive work of a substantial part of the national manpower, and on the other hand there is the diversion from normal production of a large part of the raw materials and other products which ordinarily would satisfy civilian demands. Resources and manpower segregated for this purpose are withdrawn from the normal economy, while the wages and prices required for them are added to the ordinary financial demands of our economy.
Those inflationary pressures here and in every other country are the inevitable result of a sudden demand for military preparation such as that with which Canada was confronted last year, and with which it is confronted on a higher level today. To that extent it is a world-wide problem, and not a phenomenon. A phenomenon implies something unusual; this is the usual and inescapable result of sudden defence expenditures of this kind. It is known to every man and woman in Canada who has the slightest understanding of simple economics.
The only phenomenon created in this situation is that, for some reason not yet 80709-111
Cost of Living
explained, the Canadian government seems to think that it is the only government of any important industrial nation which can go through this period of adjustment without adopting price controls or other measures to remedy the situation.
Surely the United States, above every other nation in the world, has been put forward as the exponent of free enterprise. Its vast productive power today is a tribute to the energy of free peoples under a free competitive system.' Nevertheless that country has adopted price controls. I submit that it is no answer to say that price controls have not yet proved satisfactory in the United States. They have been undertaken, and it is quite clear that the United States is going to make a determined effort to have effective price controls and to stabilize the economic conditions in that country.


An hon. Member:: When?


George Alexander Drew: Only last week Mr. Wilson,
who certainly would be regarded as an exponent of free enterprise, made it clear that they were going to move forward with the utmost vigour to remedy the weaknesses already displayed in the earlier steps they have taken. I heard one hon. member say "When", when I mentioned that they were taking steps to control prices. One of the difficulties which have confronted the government of the United States is that they did not have a price control system or a price control organization set up to deal with this at the time price controls were started.
In discussions earlier in this house we contended that this government should set up a skeleton price control system even if it was not ready to go ahead with this at an earlier date. That has been advocated by leading economists across this country. After all, as I remember, members of this government have stated over and over again that we showed the whole world how price controls can work. If that is so, surely we are the ones who can best say how they can work, and we do not need to look to somebody else to find out what we should do.
I suggest that it is worthy of note that all the great industrial countries with which we are associated in this enterprise have deemed it necessary to adopt some form of price controls at this particular time. It is my hope that price controls may become unnecessary at the earliest possible date. No matter how closely our arguments may follow the same line today, I certainly am not joining those who advocate over-all controls as part of the normal economic system within our country. May I say in fairness that I have

Cost of Living
not heard those arguments put forward in the debates that have taken place in this house this year.
I am advocating the introduction of controls because of the inescapable fact that if you have control of production you must have control of distribution and sale and price until such time as the production of the country can create that ordinary price competition which offers protection to the purchaser in a free economy. I am convinced that the sooner price controls are put into effect, the more effective they are and the more effective all controls are that are necessary at this time, the sooner we will have freedom from all controls which hinder the ordinary free operation of a free economy.
In presenting the arguments that I am putting forward I present them in the belief that no other country in the world today is capable of meeting the demands of the vast struggle in which the free nations are now engaged with so little dislocation to its normal life and with such bright prospects for the years ahead. I am not saying that as any loose expression of optimism. Production is the answer. In the end production will determine how free our economy can be. With a country with resources so much greater than those possessed by any similar number of people in the world, we Canadians have it within our power to expand our production in such a way that in most lines we will meet all our military demands and at the same time carry our civilian production to ever-higher levels. Before that fortunate position can be reached however there must be an intervening period when production cannot possibly avoid disastrous inflation because of the sudden pressures created by those military demands.
When it is argued that there should be price controls to deal with this situation, that there should be rent controls and such other controls as will meet these abnormal pressures constantly imposed upon our economy, there are those who immediately jump to the conclusion that we are recommending the full imposition of every control found necessary during the war. That is not so. I have sought to make it clear on earlier occasions in this house that much more moderate controls, much more flexible controls would be sufficient to deal with the situation which has arisen until such time as we have built up our production to the point where we can take care of both civilian and military demands in most lines of production
We are told that controls would hamper production. In fact I am under the impression that speaking in Toronto not very long ago the Minister of Trade and Commerce

(Mr. Howe) suggested that controls would interfere with our efforts at this time. For that reason I should like to read what the Minister of Trade and Commerce said in this house on March 27, 1947, as reported on page 1813 of Hansard. He said:
The primary question that was asked of me was whether controls had hampered production. I can conscientiously say that since I have been associated with controls, which is from their inception, controls have never been permitted to hamper production. In fact, controls at the moment are greatly stimulating production in several important lines.


Clarence Decatur Howe: I did not say anything different in Toronto.


George Alexander Drew: In Toronto the Minister of Trade and Commerce left the impression that he was most anxious not to see controls introduced because he believed that the circumstances did: not indicate that we would be able to carry forward our activities as effectively as we couldi under the system we now have.


Clarence Decatur Howe: That was neither the statement nor the implication. I know because I made the speech.


George Alexander Drew: Naturally I will let the speech stand by itself. I am prepared to accept without any balancing the statement I have just quoted as to the effect of price controls. The minister has now indicated that his view has not changed. He nods his head in approval so we can take the minister's statement on March 27, 1947, as his statement today and as to his views in regard to price controls, that is that he can conscientiously say that price controls have never hampered production.


Clarence Decatur Howe: Correct.


George Alexander Drew: The minister says "correct". The minister now brings his statement up to date. I am pointing out that the real issue before the house is not whether there should be price controls, but when. The government has made it clear, and the Minister of Trade and Commerce indicates that his views are still the same, that price controls at some point become desirable and necessary. Therefore the question with which we are mainly concerned today is not the form, is not the details, but when.


Clarence Decatur Howe: Now you are going away beyond the statement you just read.


George Alexander Drew: No. I shall read other statements which indicate how far the government has gone in that respect. I find it most difficult, in view of some of these statements, to understand the government's reluctance to deal with this situation today, unless it does not believe that inflation is serious in this

country. I believe it is. I believe that unless something is done right away, no matter how long ago it should have been done and it should have been done a long time ago, there are going to be increasing pressures which we have not even seen yet that will make the rise continue at an accelerated pace which will create great dangers to our whole economy in the months ahead. But the Minister of Trade and Commerce (Mr. Howe) was not alone in comments of that nature. On April 1, 1947, the Minister of Finance (Mr. Abbott), just a few days later than the Minister of Trade and Commerce, had this to say, as recorded at page 1938 of Hansard:
During the war our policy was to prevent inflation and to provide and enforce a fair distribution of goods which were in short supply. Prices were held under a pretty rigid price ceiling; but that policy worked. We are more than ever convinced that this over-all price ceiling policy was the only policy which could have worked successfully.
Granted that we are not yet in a struggle imposing the demands upon us which were imposed at that time, even though the degree may be different the effect is the same, and we see today what can happen if these pressures are allowed to continue unchecked. In 1945 the present Prime Minister (Mr. St. Laurent), who was not then prime minister, had this to say on November 23 when he was arguing in favour of the retention of controls, but his argument for the retention of those controls applied to circumstances similar to those with which we are confronted today. In part this is what he said, as reported at page 2451 of Hansard for that session;
... it is my view that if all remaining controls were removed today the consequences would be immediate, drastic and far-reaching. Prices would rise sharply; the cost of living would move steeply upward: existing shortages in food, housing accommodation and clothing, which are the three most important items in living costs, are such that sharp price advances would appear to be inevitable. The immediate price increases resulting from the hungry market and the removal of subsidies on such key commodities as milk, bread, butter, cotton textiles would accumulate rapidly as workers sought to protect themselves through wage increases, as producers raised their prices in response to rising wages and material costs, as buyers scrambled for goods and shelter to protect their individual needs, and as the speculative tendency gained momentum.
May I repeat those words, "and as the speculative tendency gained momentum."
It would be difficult to say how high the cost of living would go before the inevitable collapse. At first, higher prices in the United States and in other countries would stimulate increases here. Later perhaps price levels of the United States, if that country maintained some measure of control, might provide a ceiling. Nevertheless it seems to me clear that the increase in the Canadian cost of living before the recession set in would be very substantial, and the consequences of this would appear to be serious. The weaker producer groups in the community would be unable to increase their incomes to compensate for the higher cost of living.
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Savings of the whole Canadian people would depreciate. The returned service man would get poor value for his gratuity and re-establishment grant. Dependents of those fighting men who, unfortunately, did not return, would face serious privations. Pensioners and others who have made provision for their old age, through life insurance or other means, would find that that provision Would be imperilled and their security materially lessened.
I have read at this length from the statement of the present Prime Minister because these words accurately describe the situation with which we are confronted today. These words clearly indicate that as far back as 1945 the present Prime Minister was fully possessed of all the information which would indicate to him why pressures of this kind would create a situation that could only be dealt with by price controls and by other appropriate controls, no matter how temporary they might be. It is for that very reason that I suggest that the government has itself brought about a considerable part of this inflation.
The government in the election of 1945 at the end of the war conducted its campaign very largely on what it had accomplished in keeping down the cost of living by controls. It put forward the proposition that no country in the world had so effectively dealt with this situation without imperilling production or the ordinary living conditions of our people. Canadians had reason to remember that. Canadians had reason to believe that a government with such firm convictions expressed at that time would be likely to reassert those convictions in relation to precisely the same factors, even if those factors might be on a different scale.
Then I recall the words of the present Minister of Trade and Commerce when he raised the question as to whether the people of this country would be prepared to assume the burden of a huge bureaucracy to deal with this subject. Again I point out that the people of this country probably remembered how strongly the government had supported this position and some of the reasons it had given for accepting their arguments in this respect. I find that Mr. Ilsley, whose efforts as minister of finance have been extolled on many occasions by present members of the government, had this to say on April 1, 1947, as reported at page 1926 of Hansard for that year:
From these estimates it is possible to see that the cost of the control program was under $200 million a year, while the savings to the consumer purchasers and government as a buyer were on this hypothesis possibly $2,500 million a year. The figures are tentative, but do give some idea of the relative magnitude of the cost of and the savings effected by the government price control program.
If Mr. Ilsley's figures are correct, then relating the cost of the organization to its

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results we certainly would not be in a position to challenge, as contrary to economy, steps which would show an advantage to the Canadian people on any such proportionate basis. If that is so, then some of the arguments that have been made against setting up a vast bureaucracy to handle this matter would not apply in the same way that they would to a vast bureaucracy dealing with other things which would not produce any direct benefits to the people of Canada.
The people of Canada undoubtedly remember all these arguments that were put forward. Then there is another reason why we have inflation that goes beyond ordinary pressures. I have said before, and I repeat, that there are pressures today that are not to be measured in terms of the increased cost of our basic resources and the increased wages in this country. There is not one of us who does not know that prices have risen by a much higher figure. When the Minister of Justice (Mr. Garson) pointed out that one of the ways to tackle inflation was to stop the marking up of prices unnecessarily in this country he undoubtedly was putting his finger on one of the difficulties with which we are confronted today.
Nevertheless I am not going to suggest for one moment that we are confronted with widespread profiteering such as is sometimes suggested. Every Canadian is a human being, and human beings are inclined to act in similar ways under certain forms of encouragement. In this country we have not only had inflation as a result of the ordinary inflationary pressures of huge government purchases and the indication of more to come. We have not only had inflation because the people of Canada must have remembered the belief expressed by this government in the effect of price and other controls. We have also had definite inflation by invitation. Hon. members will recall that when the emergency measure was introduced in this house last fall to give the government wide powers to establish priority control, the Minister of Trade and Commerce (Mr. Howe) indicated at that time that under this act he could deal with the pressures that would result from government purchasing of this kind. He recognized the effect of that when he said in this house that one of the difficulties in establishing price control now was that they had not acted in the way they did before when they controlled production; that they had let the adjustment of prices take place on a broad scale or, to use his own words, "in other words they are all set." If they are all set, with prices high enough to escape any effective price controls, which was the implication his words carried, then that
Mr. Drew.]
somewhat cynical remark implied that those responsible for the price level in this country had in many cases accepted the invitation to get set for price controls when those should be introduced.
We can come to a later date when the Minister of Trade and Commerce, who is responsible for matters of this kind, again extended an invitation to get ready for controls of one kind or another. On March 5 the minister was asked by a reporter whether the government planned anything in the way of checking this rise. The minister replied:
We are studying that very carefully. We cannot announce plans so far in advance, but I think we will have something to propose before many weeks go by.
In that way the minister undoubtedly gave the suggestion that something was going to be done, because it would not be necessary for any announcement to be made if nothing at all was going to be done. I do not know how many weeks he had in mind, but that statement was made five weeks ago today, and it constituted another invitation to get ready for the imposition of controls of this nature.
Prices may have reached a point far beyond what the government would like to see in introducing price controls, but that is no argument for not introducing whatever appropriate controls may be regarded as effective at this time. The minister has indicated that this would not be done by legislation brought before the house, but would be done under the wide powers of the emergency legislation passed a short time ago, which gave the minister and the government such sweeping authority.
When it is advocated that price controls and if necessary subsidies, to the extent they may be required, and other controls be introduced to balance the effect of controls over supply of resources and production, it is sometimes said, "You must be specific as to how those controls will be carried out." The government does not permit us to know what controls it is going to put in over supply and production. The government insists upon retaining complete control, without giving any details. Therefore it would be utterly futile to attempt to deal step by step with each measure the government should take when we do not know what steps the government is going to take in regard to production and supply.
The government has contended that no nation in the world did a better job on price and other controls than Canada did during the last war. In that effort they were

assisted by very able economists. The experience of those men and women is available today. The government can take advantage of that experience and with the knowledge they possess, knowledge we do not possess as to what controls they are going to impose on production and supply, they can design price and other controls appropriate to meet the situation which will result from their action at the production and supply level. I would point out that I am not alone in suggesting that we need controls of a less severe type than were imposed during the war, and that we can have flexible controls. Some of those most prominently associated with price controls have made that very statement. They have set forth that broad proposition, without going into detail. In fact they have made it clear that the detail must be the responsibility of the government.
I would refer to Mr. Donald Gordon, who was chairman of that board. Mr. Donald Gordon has expressed his own belief that we would be better without price controls; but he has also said without reservation that price controls are infinitely better than runaway inflation.	I believe we have runaway
inflation, and we have the statement of Mr. Donald Gordon that the situation we now have demands price and the other controls that go with it. I would refer to another Mr. Gordon, not related but one of the most brilliant younger economists in this country; that is Mr. Walter Gordon of Toronto. He went much further and said that with the introduction of price and other controls in the United States a demand for price and similar controls in Canada was inevitable. Then he went on to use the very words that I have used, that what we would need in this country would be a flexible system of controls, and he then went on to make the recommendation which I and other hon. members have made in this house.
The situation is such that we cannot disregard the likelihood of having to introduce controls of some kind. That being so, and recognizing that it would take months to set up effective machinery to deal with this, before now a price control organization should have been set up that would be able to introduce in this country the most efficient, most flexible and most easily adjusted price control system that could be devised on the basis of our extensive experience during the last war and in the years following. Certainly all hon. members are prepared to concede that we had working for us in this country unselfish, brilliant, efficient Canadians who gave of their best to make this system effective. Most of them have pointed out weaknesses they would not like to see repeated. Most of them are in a position to suggest
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many improvements. I suggest, Mr. Speaker, with the evidence now before us of the need for action, that there be no further delay in setting up some such machinery with the expert assistance available to us, and that we immediately proceed to have such appropriate controls as would deal effectively with the situation we face.
As I indicated before, all the things that have been done by the government not only invite price increases by those who establish the prices at the retail level, but they also encourage panic buying. Everyone is in some way a part of this great problem. It is not the government alone, although I believe the government has a heavy responsibility to give an example by reducing all non-defence expenditures on a level that they have not attempted in any way to do. The consumer who hoards goods and goes in for panic buying, the producer who cynically exploits that panic, the manufacturer who tries to get the largest profit he can out of the demand for scarce supplies, are all germ carriers of the dangerous disease of inflation. This is something for which our citizens generally are responsible as well as the government. The response of the citizen to the demand that he co-operate will however be much more positive, and much more effective, if the government itself gives positive and convincing evidence that it is doing everything within its power to give the sort of lead that is necessary and adequate to do this job. That is one reason why I think that the time is not only overdue, but long overdue, for positive and vigorous action to deal with this problem.
There is one other consideration of the most vital importance, and that is the cost of defence production. It is only a few days ago that the Minister of National Defence (Mr. Claxton), speaking in New York on March 30, emphasized one of the dangers in our defence preparations. I quote from the text of his speech on that occasion:
The armed forces and industry combined must make a frontal attack on the cost of defence equipment. This has become so costly that neither we nor our allies can get what we know we need without going on an all-out war economy.
If we need an all-out war economy to get the things we need, then the Minister of national Defence has put forward the most powerful argument to indicate our need for price controls, rent controls and similar controls without any further delay. He has also warned us of a great danger. Every time the cost of living index goes up we are going to have much more difficulty purchasing the things that we need. The people of Russia, Poland and Czechoslovakia, with their great armament plants, have not a

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similar problem. They have no inflation there. They have other ways of tackling this problem. We do not want those methods ever to become necessary in Canada. It is to avoid methods of that kind that, in terms of reality and of a practical appreciation of the situation with which we are confronted, we say that, because we do believe in a free economy, because we do believe in the free play of prices in a free economy in normal times, we want to see that economy protected against the spiralling inflation. We want to see the people of this country given the assurance that their investments in bonds, in insurance and other investments of that kind will not lose their value and deprive the people of the protection they expected in their old age.
Mr. Speaker, I hope that no one in this chamber will again suggest it is not appropriate we should point out that danger. I would remind members of this house that it was in 1945 the present Prime Minister (Mr. St. Laurent), in the words I have already quoted, pointed out that very danger, that insurance, bank deposits and other investments of that kind, including victory bonds and such securities which are regarded as the safest of all, would lose their value and deprive our people of the security which they believed they had the right to expect. I believe this is the most vital issue now facing the people of Canada. The steps, inadequate though they may be in some respects, to deal with national defence, are under way on a large scale. This is a subject that does call for action at the earliest possible date.
Before sitting down, I should like to read further words of the minister charged with the responsibility for the administration of the act under which those controls would come. This is the text of the speech made to the Empire and Canadian clubs in Toronto on February 26 of this year, to which I have already referred:
The Canadian government has never been opposed to price controls as such. In fact, legislation is now under discussion in parliament which would give the government power to impose economic controls of all kinds as the need may arise.
We will not impose any system of price controls, however, unless and until we are satisfied that those controls will serve a helpful and not a harmful purpose in combating inflation. It may seem strange to speak about price controls as having a harmful effect in the fight against inflation but that can easily happen. Price controls would be harmful if they did not have overwhelming public support. They would be harmful if they were relied upon as a substitute for more fundamental measures such as taxes and credit controls. They would be harmful if they were not accompanied by adequate wage controls.
Nor do I think it would be wise, even if it were theoretically possible, to move into price controls until there is reasonable assurance of price stability in the United States.

The minister who would be responsible for the administration of those controls under the emergency legislation passed in this house has indicated that the government is not opposed to price controls as such. He has indicated they are considering this subject. He has indicated they are ready to act if and when they believe action should be taken. The question is whether the circumstances justify the demand that it should be done. Right across this country today there are people who are not only in a desperate position because of the necessity of buying food and other vital needs with a dollar that represents about half of what it did, and in the case of food less than half of what it did a few years ago. There are young people who do not know how they are going to own and equip a home in which to start their married life. There are many people across this country today who are looking to the future with concern because they do not know where this is going to stop. In addition to all the reasons I have put forward, Mr. Speaker, with all the earnestness I possess I urge the government to act now, no matter what steps should have been taken earlier, to give the people of Canada confidence that no matter what may happen in other countries the cost of living is going to be brought under some measure of control so that they can look forward to the years ahead with that confidence which we should have in a land with such vast possibilities as we possess today in Canada.
Before sitting down, Mr. Speaker, I move, seconded by the hon. member for Peel (Mr. Graydon):
That all the words after "That" to the end of the question be deleted and the following substituted therefor:
"this house is of the opinion that in view of the announcement made on Wednesday last of the greatest monthly increase in Canadian cost of living during the month of February to the disastrously high level of 179-7 points, immediate consideration should be given to the adoption of appropriate measures to hold down the cost of living and halt inflation."


Major James William Coldwell: Mr. Speaker, my first word is that I have been extremely interested this afternoon to hear the leader of the opposition (Mr. Drew) repeat so many of the arguments that we have made in our pleas for price controls over the last several years and, indeed, to put once again on the records of this house many of the quotations which we have put on the record on previous occasions-in fact, quotations which I had intended to put on the record this afternoon, but I shall not do so now because they are already there. I am glad, however, to see the official opposition taking the attitude it is now taking. I want to say to the leader

of the opposition that I am not going to discuss the problem of controls from any doctrinaire standpoint today. As a matter of fact, over the last few years the rising cost of living has meant that the problem became not one of doctrinaire argument but one of practical consideration. The day may come again when we can discuss this matter from the point of view of fundamental principles of political difference, from the point of view of the necessity of relating prices and the earnings of various groups of people to one another under an intelligent economic national plan. But that is not the problem before us today.
The problem before this house at the moment has been stated clearly, I think, by the leader of the opposition this afternoon. The problem is that of protecting the Canadian people against the effect of the runaway inflation from which they are suffering at the present time. I want to add this thought. While they may be suffering from runaway inflation at the present time, the prospects in the near future are such that we may expect further inflation, since the huge expenditures which we are making, and are about to make, for defence preparedness create, first, a shortage of basic supplies and materials; second, a shortage of labour; and' third, a general shortage of consumer goods. If that situation develops, as it must develop over the next few months, the present inflation will become intensified.
While I agree, as everyone in this house must, that in normal times increased production is the real cure for rising prices, increased production today will not take care of the demand for consumer goods when we have such keen competition from the government in the production of supplies for our armed forces and for our allies overseas. Indeed, in our arguments ever since 1946, when inflation began to develop, when we saw demand for Canadian goods becoming great in Europe, through Marshall aid, and through our desire to rehabilitate the countries that have been devastated, we resisted the removal of beneficial controls and subsidies because we of the C.C.F. saw that year by year the cost of living must increase and the difficulties of the Canadian people become greater as the days went by.
If we look at the statistics of this situation -and, may I say, the statistics not compiled by any person or group of persons perhaps of my economic and political viewpoint but by the dominion bureau of statistics and quoted by the Bank of Canada in its statistical summary of February, 1951-we see the extent of this inflationary process. Incidentally, all
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the basic figures I am going to use are taken from the bureau of statistics and from the February report of the Bank of Canada.
If we look first of all at 1946 we find in that year, according to the Bank of Canada, that total personal incomes amounted to $9,671 million. In that year the population was 12,307,000. The per capita income is given as $786. The cost of living index-1935-39 being 100-was 123-6. That meant that the per capita income stated in dollar purchasing power, in terms of 1935-39, amounted to $636.
In 1947 the total personal income had risen to $10,342 million. The population had risen to 12,582,000. The per capita income had risen to $822 but the cost of living index had risen to 135-5. Therefore the result was that the actual purchasing power per capita, in terms of 1935-39, was $607.
In the following year, 1948, we have total personal income totalling $11,842 million; population 12,883,000; per capita personal income, again in dollars of that year, $919. The cost of living index had gone up to 155. Consequently the actual purchasing power per capita, again in terms of the 1935-39 level, was $593.
In 1949, total personal income, $12,674 million; population, 13,549,000; per capita income, in dollars of that year, $935; cost of living index, 160-8. Therefore the per capita income, again in dollar values of 1935-39, $582.
In 1950, total personal income, $13,320 million; population 13,845,000; per capita income in that year's dollars, $962; cost of living index, 166-5; per capita personal income went down to $578 in terms of 1935-39 dollars. And if we look at the recent change-and permit me to say that I shall consider the per capita personal income on March 1 as the same as the average for 1950; there may have been a little difference, but not much-the cost of living index having risen to 179-7, in 1935-39 dollars the actual purchasing power of Canadian income on the same basis as in former years would be $535, or a drop of $101 annually in per capita real purchasing power between 1946 and March 1, 1951.
This has been going on year after year, and no attempt has been made by the government to apply any remedy. Indeed the only hon. members who have drawn this to the attention of the house over and over again, and who have moved at every session of parliament that we should reintroduce beneficial controls and subsidies in order to protect the Canadian people against this sharp drop in per capita income purchasing power, is the party with which I am associated.
I believe that if Joseph Stalin has a secret weapon, that secret weapon is not a fifth column; that secret weapon is inflation. It

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was inflation that Lenin used following the revolution, in 1917 to destroy the basis of the Russian economy of that day, and to bring about the permanent imposition of the bolshevik dictatorship which took power at that time and retained it subsequently. It was inflation that was used in Germany to destroy the German economy. It was inflation that was used in every country in Europe to undermine and to destroy the basis of the economies and the governments of several countries. And while some of those governments and some of those economies should have been removed and should have been changed by other means, I am pointing out that one weapon which has been used since 1917 by the bolsheviks in their world-wide campaign has been the weapon of inflation.
Consequently I say that if Stalin has a secret weapon today, it is inflation. And I would add this for the information of the house, that some of us get resolutions from various labour organizations across the country. I think it is very significant that we have recently received resolutions from local unions that we know are under communist control, and those resolutions oppose price controls. All of a sudden, in opposition to the major labour organizations of this country that are asking for price controls, one finds here and there a local union that is either known to be associated1 with a major union under communist control or is under communist control itself, opposing price controls. That, I suggest, has some significance in this context.
So I say that inflation is one of the secret weapons that may be used to undermine our economy and our institutions and, indeed, to circumvent or even to destroy the effectiveness of our defence effort. Because, after all, every time there is inflation, the dollar the Minister of Finance (Mr. Abbott) takes out of the pocket of a Canadian citizen for expenditures in defence will buy less in the way of preparedness; it will buy fewer tanks, fewer guns, less ammunition and fewer soldiers' uniforms.
Consequently I say that this is a very effective secret weapon. And the tragedy is that the people who should be standing against inflation have in some instances, as the leader of the opposition (Mr. Drew) indicated this afternoon, promoted this inflation because of their own selfish interests.
There are many pieces of evidence indicating the suffering being caused the people of Canada by this runaway inflation. And, you know, I think it adds insult to injury when a government department sends out the kind of literature I hold in my hand to fathers and mothers whose children are on family

allowances. The copy I have went out with the February cheques to parents receiving family allowances. What does it say? It says:
Your food dollar can be stretched. Here are some tips on how to get the best value for your food dollar! Plan meals ahead to be sure to have-
What, in the diet for your children?
-milk, fruits, vegetables, cereals, meat, fish, eggs or cheese, plus four hundred International units of vitamin D for every child every day.


Mr. Low:: And be sure to boil the turnip tops!


Major James William Coldwell: How on earth, with prices of those goods what they are today, can the parents of these children buy a sufficient quantity of milk, a sufficient quantity of meat, a sufficient quantity of fish, a sufficient quantity of fruit, to say nothing of cod liver oil or vitamins, to give these children the standard of nutrition the government's own department says they should be getting?
Then they instruct parents to keep these commodities fresh and in a cool place. So I suppose the parents need refrigeration as well as, incidentally, a home in which to place a refrigerator, as well as the children who are to live on the contents of the refrigerator. Then it says:
Children' need good food. Family allowances are for your children.
Yes, family allowances are for your children. And ever since family allowances came into effect, as I have shown by the figures I placed on record this afternoon, the beneficial effect of the family allowance has been whittled away by the tremendous increase in the cost of these basic foods, which are necessary for the health of the children of this country.


Mr. Knowles:: The food index has gone up a hundred points since family allowances were introduced.


Mr. Ferrie:: May I ask a question?


Mr. Wylie:: Make it sensible.


Gladstone Mansfield Ferrie: You stated about all those prices-


William Duncan McKay Wylie: Why don't you make a speech?


Gladstone Mansfield Ferrie: Mind your own business. You made this statement with reference to the rise in costs. Where did those costs come from? They are rising prices to the farmers you represent. Why should you condemn those costs?


Major James William Coldwell: I am not condemning the farmers for asking higher prices for their products; because I want to tell the hon. member-and he should know it, since he is a farmer himself-that if you take the cost

of the machines and supplies used in the production of these foods on the farms you will find that they have increased to an even greater extent than the farm prices of the foods to which I have referred. But let me say to my hon. friend-


Gladstone Mansfield Ferrie: What about the cost of wages?


Major James William Coldwell: All right, yes, wages are a factor in the cost of production; but wages generally have not kept pace with the increased costs of living and of production on the farm.


Gladstone Mansfield Ferrie: They have gone over it.


Major James William Coldwell: I wish my hon. friend from Mackenzie would just take a little time to study some of these questions, and then get up and make a speech about them, instead of interrupting someone who has given a good deal of time and study to the problem before coming to the house to make a speech. In other words, he might pay a compliment to the House of Commons by assuming that it expects to hear intelligent remarks in this house.
I am pointing out that this situation is imposing great hardship on many classes of people in this country. I mention the children particularly. The leader of the opposition (Mr. Drew) mentioned the young people who are getting married.


Mr. Fraser:: They are hard hit.


Major James William Coldwell: They are hard hit. When I hear young people discussing how they are going to manage to get a house, how they are going to pay for the necessary equipment for the house, how they are going to burden themselves with an impossible debt in order to get the things they need, I sometimes contrast the manner in which some of us began our first homes even though at that time we thought we were undertaking heavy obligations. The fact is that we did not undertake obligations in any way comparable to what these young people are called upon to undertake today.
But apart from the youngsters, the children, the young people, what about the aged? A few days ago the Hamilton Spectator contained a report of some surveys that had been made in that city of the condition of old age pensioners and families. We are told that in the group of old age pensioners aged from 70 to 80 years, 135 cases were surveyed and the financial picture was the same in each case- it was bad.
The need for more nursing, the rising cost of living and the loss of family support had brought more suffering to these old folk. In the cases surveyed it was found that there
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were 67 persons who were considered to be receiving inadequate nutrition. The reasons given were the high cost of living, insufficient income, no one to prepare, plan and shop and, in some cases, poor management. But the main factor was of necessity the high cost of living. We have a group of Canadians in this one city who are suffering from malnutrition or slow starvation, in their declining years. That is not only a reflection on this country, it offers great encouragement to communist propagandists to come forward with their propaganda in an effort to undermine our institutions.
I could give several other instances of unnecessary suffering from the same survey. During the month of March twelve families known to the family bureau of that city had met with consistent refusal when applying for the rental of rooms. Each family had children. There were other families which had scraped together enough money for a down payment on a wartime house but who had been either ineligible or without sufficient points to establish a priority.
I should like to put on record the details of one family. The father had served in the air force for seven years fighting for freedom, fighting for democracy, fighting to prevent our being placed under a nazi dictatorship at that time. Probably he would fight again to prevent our being placed under a bolshevik dictatorship. During the last week because of unusual circumstances this family found themselves with their furniture on the street. Their three children had to be placed with friends. Even now they are living in temporary quarters and are still searching for permanent living accommodation.
All this after the grand promises that were made to our Canadian service men and women during the war, after all the grand promises that were made to all the Canadian people during the war. Remember what the late Mr. Mackenzie King, then prime minister, said. He said that unless we were prepared now to improve social conditions immediately after the war, we shall prepare in vain. We did not prepare. We had a wonderful white paper suggesting worthwhile post-war plans, which was tabled in the house, I believe by the present Minister of Trade and Commerce (Mr. Howe), but which has been filed away and largely forgotten.
I am referring to conditions in Hamilton as an illustration because it is the most recent report on a city that I have seen. The report says further that the increased cost of living is going to hit persons such as those in one family with seven children the father of which earns $42.50 per week and whose food costs

Cost of Living
are $40. That father earning $42.50 a week earns more than some of the more lowly paid people in the city of Ottawa, and I am thinking of family men at that.
According to Miss McTaggart, executive secretary of the Hamilton family service bureau, that family gets three quarts of milk a day, three loaves of bread a day and has almost eliminated meat from their diet. A family of that size should get seven quarts of milk a day. The family sublets rooms in their house and uses the family allowance cheques to buy clothing for the children.
The father of another family reported on earns $82 every two weeks with which to support five children. Every month $86 is spent for food, and according to the food schedule they should buy $105 worth of food during that period. It was found that medical bills, glasses and paying off debts took $40. That gives some idea of the situation faced by many families in Canada.
Where is the opposition to controls coming from? It is not coming from the farmers. It is not coming from labour. It is not coming from the co-operatives. It is not coming from any people's organization that I know of. I have before me statements by some of these organizations. For example, there is the statement by Mr. Hannam, president of the Canadian Federation of Agriculture, who had this to say last January:
At the last meeting of the directors of the CFA the following resolution was passed:
That the government be asked to name a competent body immediately to undertake a continuous study of the position of the various economic groups in the nation, and to make recommendations looking towards the most equitable basis possible upon which to impose controls if and when such are needed.
And then again:
Moreover, organized agriculture believes that no imposition of general price controls should be entertained without making them effective clear across the board on all prices, profits, fees, salaries, and wages. To exempt the economic returns from any one of these groups would be to grant a privilege which cannot be justified. To do so would discriminate unfairly against the other groups.
We agree with that, and so does labour agree with that. Labour and the farmers are of one mind in that regard. What does labour say? In a brief presented to the government on February 20 this year labour had this to say:
The labour movement recognizes that wages could go up fast enough and far enough to break a price ceiling, though it sees no immediate danger of anything of the sort. It believes that the proper way to deal with this question is a government-labour-management conference to work out methods of wage stabilization. This offers a prospect of a wage policy which will do two things, both essential: (a) preserve the spirit, the principle, of collective bargaining, and (b) bring the experience of labour and
[Mr. Coldwell.l
management into the defence effort. If our government institutes a general policy of price and production controls, labour is ready to take part in a joint government-labour-management conference to consider wage stabilization.
Just before I came down to the house I was fortunate enough to get a copy of a brief presented this morning, I believe, to the federal government by the prairie farm unions. It is the brief presented to the federal cabinet at Ottawa today by Jacob Schulz, president of the Manitoba farmers union, J. L. Phelps, president of the Saskatchewan farmers union, and Henry Young, president of the farmers union of Alberta. They were accompanied by some other officials of the unions named and a representative of the British Columbia bloc. I imagine that means the Peace river bloc, the prairie bloc of British Columbia. What do they say? In part the brief reads as follows:
This leads us to repeat a previous request that the federal government implement price control immediately. We wish it to be clearly understood that in making this request we do not desire nor will we agree to a "price freeze" that would mean fixing prices at present inequitable levels.
In other words, they are saying exactly what labour has said. Labour does not want a wage freeze freezing certain wages 'at inequitable levels and the farmers do not want a price freeze freezing some farm prices at inequitable levels. They suggest something similar to what labour has suggested, namely:
What we definitely seek, and shall insist upon, is an adjustment of prices on a basis of parity. We further request that in the establishment of boards to ascertain the basis of these prices, as well as subsequent boards for administration on the policy level, the agricultural industry be given adequate representation thereon.
In other words, there should be a national organization, a national committee, or a national commission on which the farmers are adequately represented, on which labour is adequately represented, on which the consumer is adequately represented, on which management is adequately represented, in order to bring about a reasonable and proper relationship between farm and other prices, wages and so on, within the economy. Of course that means a considerable measure of economic and social planning in order to get parity among economic groups.
The co-operative union of Canada, which I think may be said to represent a very large segment of the consuming public of this country as well as certain producers organizations, wrote a letter to the Prime Minister (Mr. St. Laurent) on September 15, 1950, some time ago, before the present heavy impact was felt by the bulk of the Canadian people. They referred to the interim budget and said:

The action of your government in presenting its interim budget on September 7 was most welcome. In so far as it will serve to reduce excessive spending power, where such may exist, the legislation will tend to hold inflation in check. However, in our view, its provisions are not sufficiently far-reaching in their scope. It is apparent to us, and we would strongly urge upon you, sir, that additional and more specific controls must be introduced. The statements of various organizations representing the consuming public indicate a willingness to submit to these necessary restrictions in the interest of the national welfare.
Then they went on to say:
This belief in the effectiveness of a well administered control structure is substantiated by our experience during world war II.
Therefore you have the great labour unions of this country, the great farm organizations and the great consumers organizations, including co-operative societies, saying to the government or through the person of the Prime Minister:	We think this country
is entitled to protection against this runaway inflation. We therefore ask you to introduce a system of controls that will not perhaps be as arbitrary as they were during the war, and perhaps will not need to include some of the lesser things that were included during the war but which will give the Canadian people protection in their standards of living. We add to that and say that by means of subsidies we should endeavour to roll back prices to some extent, that by means of subsidies we should be able to provide the children of this country with such basic things as milk and so on.


John George Diefenbaker: What would be the rollback? How far back?


Major James William Coldwell: I would not care to say offhand.


John George Diefenbaker: I am just interested in knowing how far.


Major James William Coldwell: I think prices have to be rolled back somewhat. I would say, however, that we should not ask the farmers to subsidize the milk of the people. The western farmer subsidized the bread of the people from February 1, 1945, to March 1, 1947, to the extent of $48 million.


Mr. Fair:: That is only a drop in the bucket.


Major James William Coldwell: That was an unfair imposition upon one group of Canadian producers, and at the very least I think western farmers are entitled today to the additional reimbursement for the $48 million which they contributed to maintain the price of the Canadian loaf during the two years that I have mentioned. I am not going beyond that but I will say that if we are going to ask any producers to do something in the interest of the whole country then the whole country must bear the cost of
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what those producers are going to do in the interests of the entire country. Therefore, Mr. Speaker, we are supporting the amendment moved by the leader of the opposition (Mr. Drew). If he had not moved such an amendment I would have moved one. I am not happy that the situation has brought the leader of the opposition to the point where he has introduced a proposal of this description. I am not happy about that but I am happy that the opposition is combining. I hope that the opposition will combine, and I hope that certain members of the Liberal party will join with us.


An hon. Member:: What a hope.


Major James William Coldwell: May I say that a remark like that, "what a hope"-and I am not rebuking the hon. member-should not be significant in a democratic institution because in a democratic institution members should act democratically, and on vital matters of this description should not be controlled by the government whip. Let them rise in their places on this occasion and vote as their constituents would expect them to vote. The Gallup poll a few months ago showed 75 per cent but I am convinced that 80 per cent of the people of the country are groaning under this inflation.


An hon. Member:: Make it 90.


Major James William Coldwell: Well, I should be quite satisfied to make it 90. I always like to be conservative-with a small "c"-in my judgment, though usually I am liberal-with a small "1"-in my views. So may I say I hope that in this house we may have a vote which will reflect the real opinions of the members and the real desires of the people of this country. We had such a vote once before, again when the right hon. Minister of Trade and Commerce (Mr. Howe) was doing as he is doing today, leading the house. He suggested that we have a free vote on the milk subsidy. We did, and as a result the government was instructed to continue the subsidy.


John George Diefenbaker: Which they did not do.


Major James William Coldwell: Which they did not do. Six weeks later they passed an order in council discontinuing the subsidy. I am a little more optimistic this time. I suggest to hon. members opposite that if they vote with us and we have a good majority that may perhaps not compel but impel the government to introduce controls. In the past the right hon. Minister of Trade and Commerce has warmly defended controls, and I thought the leader of the opposition brought that defence vu-y well up to date today, so we may expect the government to take some action provided the house authorizes it to do so.

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I do not intend to say more. I have spoken more or less of the economic impact of the inflationary situation. I could join the leader of the opposition in speaking of the effect it has had on our educational institutions, on the cultural activities of many of our people, and so on. I know the buying of books has been cut down in some places where people are not so close to libraries where they can get new and desirable books; and the effect has been felt in many other ways. I believe every consideration warrants this house voting in favour of this amendment. Indeed I would go a step further and say that the arguments that have been and will be advanced should persuade the Minister of Trade and Commerce and the government to rise and simply say, "There is no need to press this to a division. We accept the point of view and we are going to introduce beneficial controls and subsidies immediately."


Solon Earl Low: At the
outset, Mr. Speaker, I want to say that we too are very happy to be able to support the amendment introduced by the leader of the opposition (Mr. Drew). As the hon. member for Rosetown-Biggar (Mr. Coldwell) said, we are not happy because the situation has developed to the point where that amendment has become necessary, but because it gives us a chance to speak what we think is in the minds and hearts of people across this country.
Before I launch into the things I would like to say in support of the amendment which I have already announced we are going to support, I want to place on record a few facts. These facts are basic to what I shall have to say, and are found in the Canadian Statistical Review for February, 1951. The first fact is that during 1950 the gross national production of the country increased by 8 per cent. Of that, 4 per cent represents write-up in prices, so only the remaining 4 per cent would be an increase in volume. The second point is that during 1950 the gross national expenditure of the people of Canada increased by 7 per cent. Of the total 4 per cent represents a write-up in prices and only 3 per cent an increase in volume or an actual increase in purchases by the Canadian people. The third fact is that during 1950 the personal incomes of the Canadian people increased by 5 per cent, but during the same year their personal expenditures increased by 7 per cent. The next important point is that during 1950 retail prices rose by 10.6 points. The next important fact is that the general cost of living index rose to 179-7 in February of this year, a rise of 4-5 points, and that in the first two months of 1951 the index rose by 7-2 points. One other very important thing

I think should be placed on record as basic to this whole discussion is that the net farm income declined by 6 per cent between 1949 and 1950. This supports the claim made by both previous speakers that the high cost of food products in Canada today has not resulted from the fact that the farmers are demanding and getting unreasonably high prices for their products.
With these things in mind, Mr. Speaker, for a little while I should like to deal with some important causes of the present dilemma. I am in agreement with the previous speakers when they say the most important problem facing the people of Canada today is that of runaway inflationary prices. The high cost of living is a problem which must be tackled. It must be given the most intensive thought and work it is possible to give. I do not mean to suggest, of course, that the government can do it all. The general run of the Canadian people will have to take their share of responsibility for seeing to it that scientific means are adopted which will give the people of Canada relief from this terrible burden of living costs. It seems to me we ought to be giving, and in fact we ought to have been giving long ago, a great deal more thought to the causes of present high prices than we have given thus far. Because we have been derelict in giving that careful thought and attention to the causes, it seems to me that now we must get. down to basic principles and find out what has given rise to the inflationary situation we-face today. The present government is reaping what it has sown, but unfortunately it is: not only the government that is reaping. It is a tragic thing that the poor people of this country, who had nothing whatever to do-with bringing about the present situation, are also doing the reaping and suffering the-real hardships.
The present inflationary situation had its. roots, to some extent at least, in the way the-government financed the war. Early in world, war II the minister of finance declared that he intended to follow what was then called a pay-as-you-go policy. But it did not take him very long to abandon that policy, if he-ever started it, and go back to the old system of debt financing under which the national debt was run up from $3-5 billion to $16' billion in the course of less than six years. That was not a pay-as-you-go policy, in spite-of the government's earlier declaration that they would follow a pay-as-you-go policy. Some very foolish things were done in the-course of the attempts made to finance during the war years. Some very foolish- things were done in the bond drives. Early in the war the government attempted a bond drive-

throughout the country to induce individual Canadians to buy bonds, not so much because the government needed the money to pay for the war but, as they openly declared, the major reason was to get out of the hands of the potential consumers in this country their purchasing power so as not to create inflation. The government was to use it as an antiinflationary measure.
Let us examine one simple example of what happened after they made that declaration to the Canadian people that this was largely an anti-inflationary measure. Under whatever regulation the government may have been operating, the chartered banks of this country were allowed to finance bond purchases on the part of individual Canadians. An individual Canadian could subscribe to a certain amount of bond purchases, and he could go to the bank for a loan to meet ninety per cent of the cost of the bond. A credit entry in the amount of the bond purchase was created on the books of the bank, which simply meant new purchasing power being injected into the bloodstream of this country. A large amount of that sort of purchasing power was injected into the bloodstream of Canada, and what happened? A great many of those people could not possibly pay for those bonds. They bought them for patriotic reasons or because pressure had been placed upon them. Eventually the bank took over the bond and simply repaid the person the amount of the cash equity he had in the bond.
What was the net result? Instead of being an anti-inflationary measure it became the worst possible kind of inflation because, while through that method individual Canadians were enabled to buy bonds, what happened was that a large amount of new purchasing power was injected into our economy without a corresponding increase in the production of goods and services. The banks' holding of dominion securities increased. Now, that is the kind of antiinflationary policy that was followed. It is only one example of the sort of foolish thing that was done during attempts to finance the war on what Mr. Usley said was going to be a pay-as-you-go policy.
The second important thing we have to keep in our mind is the way the government refused to shoulder the responsibility of a specific policy for regulating the money supply of our country. This was another thing that contributed during wartime to the setting of the roots of inflation. The government shifted the responsibility to the chartered banks a good many years ago. During wartime they simply left the regulation of the money supply
Cost of Living
to the chartered banks of the country, and that was during one of the most dangerous times in Canada's history. The result was that the money supply became totally unrelated to goods and services available for purchase.
Another point, Mr. Speaker, is that since 1945 the government definitely discouraged production by their taxation policy. There are some, of course, who deny that is true. If the Minister of Agriculture (Mr. Gardiner) were in his seat, I imagine he would be one of the first to say that was not true. The facts show that it is true. At the end of the war what we needed more than anything else was abundant production of all kinds of goods and services, but the government failed. The high rates of income tax and the low exemptions they initiated, and a most fiendish tax enforcement policy, discouraged the farmers from all-out production. The iniquitous system of net worth which was introduced did more harm to the farmers of western Canada than anything else of which I know. If anyone takes the trouble to examine into the true facts of the situation, he will see that in the province of Alberta our cattle population in 1939 was 1,230,000. By 1945, owing to the almost superhuman effort of the farmers, the cattle population was lifted to 1,860,000, and in the meantime they had marketed a great many thousands to help the war effort. By 1949 the cattle population had shrunk to 1,465,000, nearly 400,000 less. This decrease was largely as a result of the foolish taxation and other restrictive measures adopted by the government.
If the government was aware of what was happening, they did not seem to care. Proper policies at that time certainly would have induced an increase of production of the very things that were needed. If the government had, during that period between 1945 and 1950, kept its word and established stabilized prices on farm produce in this country, there is no end to the productive effort those people would have made. The amount of productive effort they made during the war, which has drawn tributes from thinking men the world over, would have been continued.
High income tax rates and the excess profits tax also did much to discourage production in the industrial field. Those high rates of tax that were continued for some time after the war caused a shift to plant expansion or to needless modernization of machinery in the plant, and the installation of new machinery long before the old machinery became obsolescent. Everyone knows that these things, in themselves, are inflationary because money so spent in the expansion of plant and in putting in new machinery produced no consumer goods. The balance of purchasing power was disturbed, so we find inflation.

Cost of Living
The government's tax policy also tended to push prices up, as has already been said. The tendency all along has been to increase hidden taxes. It will be recalled that in 1947, when the Minister of Finance (Mr. Abbott) followed the most unusual practice of announcing to the people over the airways that he was introducing certain excise taxes, a number of things were included, some of which were essential. Everyone could see this excise tax. Everyone recalls, however, that it was not long until it was converted into a sales tax at the manufacturer's level. It did as much as anything to force prices up and bring on the present state of inflation.
Mr. Speaker, one could go on multiplying these examples all evening to indicate that the government certainly was derelict in its duty, and by its neglect, or by its deliberate policies, contributed to the present situation of inflation. The government created a most unusual situation wherein the economic law of supply and demand simply could not work. The whole population of Canada was adversely affected by these policies. Before I leave the farmers, may I say that the government put ceiling prices on many of the products that came from the farm, but allowed the prices of the commodities the farmers had to buy to go up to whatever level the manufacturers wanted to push them. Machinery, repairs, clothing, as well as various other things were allowed to go up, and as a result the spirit of get all you can while you can became the spirit that activated the people. There was the spirit of gouge to which I have referred before on a number of occasions. Primary producers therefore were discouraged about prospects for the years to come. Right from the end of world war II the Liberal government advised and pleaded with the people of this country to go slowly in making purchases. "Do not buy now," they said, "but wait a while until prices come down. Everything will be hunky-dory then." A good many people took the government at its word, and they tried to co-operate with the government in their attempt to control the rising prices and the inflationary situation. The tragic part of it, Mr. Speaker, is that prices did not come down. These very people who did everything they possibly could to 00-ioperate with the government, on the government's assurance that prices would come down before they had to buy, today find that they have been dreadfully penalized. They are having to pay greatly increased prices now for the things that they cannot defer buying.
I know of people who were planning to build houses two or three years ago. They were inclined to take the government at its
(Mr. Low.]
word and they said, "Well, I think we had better not go into the market and compete for the materials to build these houses; the government has assured us that everything will be all right and that prices will come down." One man told me today that simply because the home builder that he knew waited for a year, on the strength of the promise of the government that everything would be all right, he now finds that he will have to pay $800 more for the same materials to build the house that he wanted to build last year. It looks to me, Mr. Speaker, as though that situation alone is sufficient reason for the fast-waning support that the Liberal party enjoys in this country today.
In the past few months this government also has issued what amounted to invitations to merchants and others to boost their prices; and those people did boost their prices. On several occasions the Minister of Trade and Commerce (Mr. Howe)-and I have his words here in Hansard; if it becomes necessary I can easily put them on the record-made about controls statements which were clear invitations to the people of this country to boost their prices as far as they possibly could-"controls if necessary, but not necessarily controls." It sounds a good deal like the old Mackenzie King cry, does it not? That is what has happened.
On those occasions when we on this side of the house have brought up for discussion the high cost of living and especially when direct controls were advocated by the hon. member for Kootenay West (Mr. Herridge), the Minister of Trade and Commerce, in speaking to that motion, made the statement that it was not anticipated that direct government controls would be introduced but, he said: "If it becomes necessary later, certainly we will give it most thorough consideration." We all know what has happened. The spirit of gouge has spread over the whole country; and that seems to be the spirit that is activating a good many of the people today.


An hon. Member:: And they have got set.


Solon Earl Low: Yes, and they have got set. There is no question about that. They increased their prices to a point where there would not be any danger to them if price controls were found to be necessary.
Right from the time of the ending of world war II the Liberal government began to become party to international arrangements like the United Nations, Bretton Woods and other things, under which it became necessary for them to drain off a certain amount of Canadian production to send to other nations. We also followed the policy

of making available to other nations vast quantities of supplies, in the form of outright gifts or in the form of long-term loans; and so the drawing-off of the top portion of our production in Canada to be sent to other countries became a serious contributor to the present inflationary situation.
The potential inflationary condition of 1945 therefore developed into a real one as decontrol took place and as the government did nothing else to prevent the situation from becoming as serious as it now is. We have now	become	parties to	NATO and toColombo, under which international arrangements a good many billions of dollars' worth of our Canadian production is to be sent to other countries. The money generated in this production will be left behind to be spent here in competition for the goods that are left. What is the result? The government says: "It is necessary for us now to put before the House of Commons a huge budget". That	budget	provides	for	the	expenditurethis year of $3,586,915,657. That is exclusive of certain supplementary estimates that have been introduced to cover expenditures for the last fiscal year and perhaps some more for this year. That huge amount of money during the next fiscal year will go out to be spent	in competition	with	the	purchasingpower of nearly fourteen million individual Canadians; and they will be competing for goods that are now, in many branches, in short	supply.	What	is going	to be the
situation?
I should like to be able to put on the record some figures, Mr. Speaker, in the way of an analysis or a break-down of the present estimates that were tabled in this house about
9, 1951	1747
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two weeks ago, in order to show hon. members and the people of the country just exactly what that budget is going to do to the Canadian people; but it being six o'clock, I presume it would be wise to hold this matter over until we resume at eight o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Solon Earl Low: Mr. Speaker, at six o'clock I
mentioned that I had been very much interested in an analysis of the estimates placed before the house by the Minister of Finance (Mr. Abbott) something over two weeks ago. I have taken those estimated expenditures for the fiscal year ending March 31, 1952, and I have placed in tabular form the various departmental expenditures. I have shown them in the first table as percentages of the gross national product and, in the second, as percentages of the national income, assuming in each case that the fiscal year 1951-52 will show approximately the same gross national production in Canada and approximately the same national income as did 1950-51.
With your permission, Mr. Speaker, I should like to place these two short tables on the record, because they show in tabular form those relationships which I believe the people of the country would like to have.


Some hon. Members:: Agreed.


Solon Earl Low: They are as follows:



DOMINION OP CANADA


[Stage Direction]
Of the estimated Expenditure for the fiscal year ending March 31, 1952, for each Department				
Gross National Product ..	. . . $17,793,000,000	Per Capita $1,282.75	Per Cent of Expenditures 100 000	Per Cent of Gross National Product 100-0000National Defence 	. . . 1,600,000,000	115.35	44-606	8-9923Defence Production 	
64,212,001	4.63	1-793	*3608Finance 	.. . 582,758,603	42.01	16-246	3-2752National Health & Welfare	. . 474,214,103	34.19	13-220	2-6651Veterans Affairs 	. . . 209,180,700	15.08	5-831	1-1757Public Works 	. . . 92,616,145	6.68	2-582	[DOT]5206All other departments ....	.. . 563,934,105	40.66	15-722	3-1694Grand Total 	.. . $ 3,586,915,657	$ 258.60	100-000	20-1591
Population of Canada 13,870,946.
[Stage Direction]
Cost of Living

[Stage Direction]
Of the estimated Expenditure for the fiscal year ending March 31, 1952, for each Department
Per cent of
Per cent of	National
Per Capita Expenditures	Income
National Income	$14,164,000,000	$1,021.13	100-000	100-00National Defence	
1,600,000,000	115.35	44-606	11-30Defence Production	
64,212,001	4.63	1-793	-45Finance	
582,758,603	42.01	16-246	4-13National Health & Welfare ..	474,214,103	34.19	13-220	3-35Veterans Affairs	
209,180,700	15.08	5-831	1-47Public Works	
92,616,145	6.68	2-582	-65All other departments	
563,934,105	40.66	15-722	3-98Grand Total	$ 3,586,915,657	$ 258.60	100 000	25-33
Population of Canada 13,870,946.
When one takes a look at the estimated expenditure of more than three and a half billion dollars for the ensuing fiscal year, and realizes that those dollars will go out and compete with the expenditures of 13,870,000 individual Canadians, one begins to wonder just exactly what is going to happen to prices unless something very effective is done, and that very soon, to prevent any further inflationary rise.
On the present basis, with the cost of living index at 179-7, according to the return for the month of February-and I think it will be much higher when the March figures are made known-what does this huge sum in the estimates do to our people? Here is what I think it will do. The budget estimates of $3,586,915,657, recently tabled by the Minister of Finance, have a total purchasing power today of only $1,996,061,172, in terms of the dollar in the base period 1935-39.
That means that the purchasing power lost to the Canadian people through runaway prices will be no less than $1,590,854,485, on the estimates of the Minister of Finance alone. This means that every man, woman and child in Canada will be deprived of $114.69 in purchasing power through inflation of prices on the cost of living index of 179-7, on the government estimated expenditures alone. And of course in addition to that we will have to calculate what the loss in purchasing power for each individual in Canada would be on the expenditures of provincial governments, and on their own behalf when they attempt to buy food, eggs, meat, cheese, pay the rent, buy replacements, make repairs, buy clothing and all that sort of thing.
When all those things are calculated, then I would ask the house what kind of future for the Canadian people those figures presage. That is the question which every

serious-minded person in Canada will have to ask himself. Is it going to be possible for the Canadian economy to right itself, or is it going to be necessary to have government action to bring prices under control and to stabilize our Canadian economy?
Evidently the government has had faith in the ability of our economy to right itself, but I say to you that government policy has failed. Even fiscal measures the government took as anti-inflationary measures have failed, as witness the recent heavy jump of over four points in the cost of living, within one month. It must be kept in mind that the present situation has arisen only partly as a result of economic affairs. I was talking during the dinner hour with a member of the house who expressed a thought with which I can agree. He does not happen to be a member of the opposition, but that does not make any difference; he is right, just the same. He says, and I agree with him, that to a certain extent the present situation has arisen because of psychological factors. That is perfectly true. So that We have to keep in mind economic factors, some of which I have stated, as well as a number of psychological factors, which have placed a terrific pressure upon prices.
When I refer to psychological factors I have in mind the fear of war, which is one, and the fear of shortages, which is another. Those fears have compelled men throughout the country to do much more buying and much more hoarding perhaps than they should be doing. I believe that situation can be well illustrated by looking around and asking oneself how many 1951 automobiles people own today. It might be interesting to note that the statistical review published a short time ago indicates that there was an increase in motor car purchases in Canada between 1949 and 1950 to the extent of 60

per cent. What does this mean? It simply means that the people of Canada who can get hold of the money to buy cars are trying to get under the wire so as to have the latest possible model. They fear they will not be able to get new cars for a long time.
That is one of the psychological factors we have to keep in mind. No one knows how long the present condition of cold war will last. But if it should last for a number of years, then it is conceivable that our economy could be shot to pieces by runaway prices-unless of course proper remedial action is taken at once. That is exactly what Stalin wants. At one time he and his communist pais throughout the world predicted that the free economies would fall into devastating depression and ruin themselves that way. World circumstances prevented that. Now it is very likely that those same enemies firmly believe that they can make inflation do for them what depression failed to do, or what they failed to get depression to do.
International communism will do its utmost to wage for many years, just as long as it is possible for them to wage, a war of economic attrition which will revolve around the continual shrinkage in the value of our currency and the currencies of all the democracies. Stalin knows that our economy and the economies of the free democracies can be wrecked just as effectively that way as by an all-out shooting war. It is likely that he will follow the cold war method just as long as he can, feeling that we have not the brains nor the will to make the necessary financial and economic changes to ward off disastrous economic break-down.
If we allow ourselves to be further weakened economically the chances of our ultimate victory over communist imperialism certainly will become quite uncertain.
It is obvious that something will have to be done immediately to bring runaway prices under control. The questiop is what? That is the big question. We believe that in normal times when economic laws are allowed to operate a free economy is the best economy. We do not advocate a system of direct government controls as a permanent part of the type of economy that we would like to see, but we are not now living in normal times. I must emphasize that. Therefore we will have to adopt policies designed to meet the present difficult conditions and to get us out of these present difficult conditions.
On one or two occasions since the session opened in January the Social Credit group have put on the record what we consider to be the necessary short-time requirements to stabilize the Canadian economy in these
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times and to make certain that we are not destroyed economically. I shall take just one or two brief moments to review the outstanding phases of the proposal which we have put forward. We think that it will be necessary for the government suddenly, overnight-it should not be done in a long drawn out way, a matter of invitation, such as has been suggested in the past-to impose over-all price and wage controls. That does not mean the freezing of prices by any means. When you have applied over-all controls overnight, then of course you have to set about an adjustment of prices to provide a fair profit and an adjustment of wages perhaps to conform with the adjusted price levels about which I have spoken.
If we make this effective and complete I am satisfied that it will be possible to hasten the time when our economy can be free again to operate according to well defined fundamental economic laws. Farm prices will have to be adjusted to provide for a parity with the adjusted price levels. This may require a certain amount of subsidizing. We advocate that that be done wherever necessary in the interests of parity for the farming population of our country.
The next thing is to see that every possible encouragement is given to increase the production of the required goods and services in our country. I do not think we can stress this point too strongly. The best cure for inflation, the best remedy for rising prices, is the production of the necessary volume of goods and services. We believe that it may be necessary to use producer's subsidies and various other kinds of inducements to get this all-out productive effort. If it is necessary, let us get it done because there is no better way of meeting the situation than through an all-out productive effort.
The third important step is to maintain ihe purchasing power of the low income groups in our country to enable them to buy the necessities of life. The hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Carleton (Mr. Drew) have pointed out the tragic circumstances of a good many of the low income groups in Canada as a result of runaway inflation and runaway prices. We feel that it might be necessary- if it is necessary we will certainly support the government in doing it-to introduce consumer subsidies on certain selected items, perhaps on quite a number of items that go into the everyday cost of living.
If commodities do become scarce then we feel it may even be necessary to introduce rationing in order to see that there is an equitable distribution and therefore some sort of equality of sacrifice in whatever effort we
[Stage Direction]
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have to make. As a larger percentage of the production of the nation is diverted to war purposes, thereby intensifying inflationary prices; as increasing government expenditures compete with individual expenditures, then we may have to adopt a number of other important fiscal policies to meet the situation.
In brief, that is what we are proposing as a short-term policy. That does not say by any means that we believe that this is all that will be required. But we do think that if that policy is adopted it will go far toward bringing the present dangerous situation under control.
In times past when the Social Credit group in this house have placed before hon. members proposals for scientific financial and economic reform we were often met with derisive shouts of, "Oh, yes, those are Social Credit rubber dollars" and the like. I should like to introduce the members of this house to a perfect example of a rubber dollar. This is an anaemic, emaciated entity that one might call a shivering skeleton of a Liberal dollar that has a hard time today to buy fifty cents' worth of anything.
An hon. Member:: Throw it over.


An hon. Member:: Pass it over.


An hon. Member:: Send a million over.


Solon Earl Low: We all want to get hold of more of them. We have to if we are going to survive. This has plenty of rubber in it. It has stretched considerably. When the pressure was let go it bounced back and is only half what it was at one time. I cannot think of anything more rubbery than that. There is a rumour abroad that the Liberal government is going -to ask the Canadian Bank Note Company to run off another bill, a two dollar bill to commemorate this marvellous new age, this brave new situation into which we have got ourselves. This new two dollar bill is to be called the St. Laurent dollar.


Mr. Gibson:: How about the Aberhart
dollar?


Solon Earl Low: The Aberhart dollar was never like that. These people who have talked of rubber and stretching in the past had better just turn the spotlight on themselves for a little while in order to see what is happening. As I see it, the best evidence in the world is this shivering skeleton, the thing we call a dollar, which is having such a hard time today to buy more than fifty cents' worth of anything.
To be serious, and in conclusion, the government simply must set about putting "sense" back into the dollar that they have allowed to depreciate so seriously, and you

can spell that "cents" or "sense", whichever way you prefer. We are asking on behalf of the people of Canada for lower living costs. We ask also that whatever controls are found necessary to accomplish that result be accompanied with safeguards so that the individual freedom of the Canadian people can be preserved.


Mr. J. A. Bradette (Cochrane):: Mr. Speaker, I am taking this opportunity to present in these precincts some of the reactions that I received from my constituents during the Easter recess. Every member of parliament, no doubt every senator, and certainly the Prime Minister (Mr. St. Laurent) and every member of the cabinet are fully aware of the high cost of living at the present time. They have felt it themselves and they were told by their constituents. Everyone now listening to me no doubt has received since the beginning of the session a nice white square card on which there are words to the effect that members of parliament should see to it that the cost of living is drastically reduced. I am going to speak my mind openly as I always have, and I believe I will be expressing the sentiments of the people whom I have the honour to represent. However, even a member of parliament has to be guarded at times, and the leader of the opposition (Mr. Drew) this afternoon, and also the leader of the C.C.F. party and the leader of the Social Credit party, were guarded to some extent in the statements they made on this very important subject.
I qualify my remarks by stating that during the last war I was a member and vicechairman of the war expenditures committee. At one of its sittings-and I knew that goods were being rationed and there was control on the commodities of life-very innocently I had the audacity to state that I thought there was too much advertising in the press of the country, not only of the commodities of life but also of some of the luxuries. I also mentioned the fact that large catalogues of hundreds of pages were still being issued, and the housewife would only get an average of about one article out of six when she ordered. You should have seen the kind of press I received and the kind of unfavourable publicity my remarks gained1 for me in every section of Canada.
I do not know why it should not be possible for a member of parliament to try to represent his riding sincerely and honestly and to speak the truth as he sees it. Before I proceed any further 1 must make one point very clear. There are three newsprint and sulphite industries in my constituency and I know that the government is now going to carry out some kind of control on the export price of

that production. If we are going to have controls on commodities we must have control of wages also. You cannot separate the one from the other. Any man who knows anything about elementary mathematics should realize that two and two make four and nothing else, no matter what some leaders may say.
I was astonished this afternoon when the leader of the C.C.F. party, for whom I have a high personal regard and respect, kept away from that situation. Again let me make the situation very clear to parliament and to the people whom I represent at the moment. You cannot have price control unless you also have wage control. I make that statement very deliberately indeed because there is no other way to deal in a practical and logical manner with the problem that is agitating the minds of the people of Canada at the moment. The leader of the C.C.F. party made a special appeal at the end of his speech to the Liberal representatives in the house. I am going to vote against the amendment. I am going to vote with my party, and I am not ashamed of doing so. I am proud of it.
I must tell the leader of the C.C.F. party that there must be very rigid controls so far as their whip is concerned. I have been a member of parliament for many years, and I have not heard a single word from any of the Liberal whips who have served over those many years as to the way that I should vote. I was never told how to vote on any question.


Mr. Mclvor:: Nor I.


Joseph-Arthur Bradette: I am sure the whip will
follow the same course on this occasion. We are here as free people and as members of a national party. We will vote according to our conscience and according to what we believe is best for the Canadian people as a whole and the people of our own constituencies. We enjoy the benefits of a free democracy in this country. Under such a way of living no doubt we reap wonderful benefits but at the same time there are also weaknesses in the system that must of necessity be overcome not only by the effort of the government, but also by every citizen. No government would be strong enough to overcome a situation like the present one by itself unless it has full co-operation by all. Every citizen of the country who is worthy of the name must make the necessary sacrifices in order that the system we cherish, our freedom and democracy, our parliamentary system, our right to free expression, may be preserved.
That does not mean regimentation. It means the free will of a free people to do
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things according to their conscience. It means the freedom of a member of parliament to vote according to his own conscience in the best interests of his friends, his constituency and the country as a whole. The easiest way for the government to settle the question of the high cost of living would be to impose controls all across the board. That would be the easiest way, but would it be a really democratic way? Would it really be a solution? Under the present circumstances will the Canadian people be ready and willing to accept such a method of governing the country and regulating the actions of our people at the present time? Personally I would say absolutely no, that it would not be acceptable to the Canadian people.
It is true that during time of stress, time of war, when our young men and women are willing and ready to make the greatest sacrifice that human beings are called upon to make, to give their lives for their country because of certain ideals, then the citizens as a whole are willing to make certain sacrifices, and controls will then work. However, some people must have short memories when they clamour for controls such as we had during the last war. How many times have I seen newspapers and periodicals cursing controls and criticizing Donald Gordon! How many times have I had private conversations with representatives of industry and others who were maligning the name of the man who administered controls and his personnel, although he made a marvellous job of it and was a fine Canadian. It was not always pleasant for him. How many times have I heard my own family, relatives and friends in my own constituency abusing the system and the government of the time although they were doing a magnificent job!
When we speak of controls let us be careful about it. Does anyone in the house want control now all across the board on all commodities, control that will affect our exports and imports? Certainly people are not ready for such a situation. I notice that the amendment moved this afternoon by the leader of the opposition is well guarded in its language. You heard it, and I will read it again. It is as follows:
This house is of the opinion that in view of the announcement made on Wednesday last of the greatest monthly increase in Canadian cost of living during the month of February to the disastrously high level of 179-7, immediate consideration should be given to the adoption of appropriate measures to hold down the cost of living and halt inflation.
There is no mention of control there. I can only see one primary reason why control is not mentioned. I refer to what the leader of the opposition said in the House of Commons on February 21, 1949. I will read

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his words in French because at the moment I only have the French copy of the speech that he made. He said:
(Translation):
Mechanism of a dictatorship:
I do again urge members, and particularly those on the government side, to read carefully these arbitrary powers, these orders in council carried forward by statutory enactment, and which we are asked again now, in 1949, four years after the termination of hostilities, to renew. There you will see the mechanism of dictatorship. There you will see power to exercise almost unlimited authority over agriculture, over industry and over the economy of our country. Wider powers could hardly be imagined. And those pokers are exercised, not under the direct authority of parliament, but under the executive power of the government itself, without any clear definition of their limitations or purpose.
I remember perfectly that during the last federal elections, my Conservative opponent went around my riding saying that the leader of the opposition . . .
(Text):
During the last election the leader of the opposition was saying that controls should be abolished immediately. I do not know how the leader of the C.C.F. party could interpret the amendment moved this afternoon as involving absolute controls so far as Canada is concerned. It certainly is not there. If the amendment carried, there, would be no implication of such a scheme. If you read the amendment you will see that the word "control" is not even mentioned.
In this country the cost of living is affected in two different ways. We are a great exporting country, I believe the fifth in the world, and for that reason our national economy of necessity must be very sensitive to the export trade. We have to buy raw rubber from the United States, for instance. In January, 1950, rubber stood at 44; in December of 1950 it was 164. We have to buy raw wool from the United States, Australia and Britain.


William Joseph Browne: We can still send some to Poland, though.


Joseph-Arthur Bradette: I did not get that. Wool
stood at 157 in January of 1950. In December of 1950 it was 304. In the past we often heard our good friends of the C.C.F. party say that if only there were socialist governments in Europe and Britain there would be no possibility of any profiteering as far as production was concerned. Well, we have had socialist governments for the last four years or more in Australia, New Zealand and Great Britain, and we have seen those three governments corner the wool market of the world. Did they do that for the benefit of the rest of the commonwealth or for the

good of the rest of the world? No; they did it to make a profit out of the sale of that wool. When the Canadian people buy wool, they have absolutely nothing to say as far as the price is concerned; they must pay what is asked for it.
These matters we must keep in mind in a discussion of this kind. Take cotton yarn and thread. In January, 1950, they were 164; in December they were 169. Take iron and steel billets, partly imported; they went from 187 to 207. Certainly we have no control over those prices. No matter what the Canadian government might do, no matter how hard we might try to get these things from Great Britain or the United States for less money, we have no power to bring about a reduction of any kind. Let us take some other items that enter into the cost of living. Who would dare to say we should stop Canadian farmers selling their beef in the United States market? I well remember the agitation some three years ago when the farmers wanted access to that market, and rightly so. That is one of the principal reasons for the high cost of beef at the present time, but who would dare to say the government should tell the farmers we are going to put an embargo on the export of beef? We all know what would be the reaction of farmers in this country from coast to coast.
These are things we must have in mind in discussing this question. Look at lumber. What would happen if we put an embargo on the export of lumber, and took away from our producers the markets they have in the United States and Britain? There would be a great hue and cry on the part of the lumber operators of this country, and rightly so. In my own constituency we have two newsprint mills and one sulphite mill, and every pound of that production goes to the United States. We all know what has happened to the price of newsprint in the last three years. It has increased by at least 200 per cent. Would it be practical or feasible for the government to say that the price of newsprint must be reduced to what it was three years ago? These are some of the things that we as parliamentarians must thoroughly consider if we are to deal with these matters logically, for these things make one realize how difficult it is for the government to please everyone.
We export many other things. Most of the copper from Noranda and from the big smelters in British Columbia goes to the United States market. We also export to that market zinc, some lead and other metals, and we are glad to have such a market. Is there anything we could do about those prices? Then there is nickel, one of the

biggest, yes the biggest, mining industries in Canada, employing thousands of people and adding so much to our national economy. All that production goes to the United States. Are we going to lower these prices even though our neighbours are willing and ready to pay them? I just bring these points to the attention of the house to help every hon. member realize how difficult it is to deal with a question of this kind at the present time and satisfy everyone.
I spoke to my own people only a few days ago and told them there were many ways in which the Canadian people could help. I am going to enumerate some of those ways. It is surprising that the cost of living should have increased so much during the month of February, but in large part that was due to the fact that during the course of last fall most of the raw material that had to be bought by the United States and Canada had increased in price tremendously. Now the cost of production of the finished article has almost caught up. In the United States, for example, the average price of goods at retail increased only 10 per cent in the nine months between March, 1950, and January, 1951. This is a small increase when compared with the increase in the cost of raw materials. But it is not likely that the gap will last much longer. As the raw materials which were bought at the higher prices get into the finished products, the cost of those products will go up also.
This is not a pleasant situation to face, but we must be realists and study it from all angles. Wishful thinking will not settle the problem. Obviously as long as the countries of the world are bidding against each other for basic raw materials such as wool, cotton, rubber, lumber and lumber products including newsprint, sulphite, wood pulp and so on, and base metals and farm products, Canada has to go along with them or do without. Are we going to do without cotton or without wool? Are we going to do without rubber? I just leave that thought with hon. members to answer for themselves and their constituents. That is why the United States, Britain and France are trying to get the main producing and consuming countries outside the Russian orbit together to devise ways of distributing scarce materials they all want. The whole world wants those scarce materials.
After the last war all nations shared the fear of a depression. They were afraid that what happened only a few years after world war I would recur with all the other disturbing factors that such an economic calamity brings with it. So government policies were formulated, with well prepared
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blueprints properly drawn, designed to bring about full industrial activity, fair prices for our agricultural production, almost full employment and plenty of production to meet the requirements of the consuming public. Under that planning it was hoped that there would be no inflationary or deflationary extremes. Of course practically all those high hopes were built upon the premise that after the complete defeat of the axis powers upon the battlefield we had every reason to expect that the whole world was going to enjoy a very long, if not a permanent, period of peace which would allow it to recover from the terrific loss of life, the tremendous destruction, the misery and despair which followed that war. We must carry that thought in our mind as well, because in part at least the present situation has resulted from the policies of Hitler and Mussolini from 1939 to 1945, and indeed from world war I. We are still feeling the effects of some legacies of both wars.
The organization of the united nations in San Francisco enhanced1 those hopes, which unfortunately did not come to fruition. Instead of unity and understanding among the nations the world found itself divided' into two camps, in fact into two worlds. In the other camp was Soviet Russia with all her might, her advantageous position, the well organized and ruthless tentacles of Moscow communism spreading into every part of the world and the so-called1 cold war. The destruction of human lives and material resources has had a devastating effect upon us. Most of the high cost of living of the present time must be traced to Joe Stalin, with his expansionist policies and the threats of war he is making all over the world. At the present time we know that pressure is being brought upon parliament to apply price controls at once. This measure could easily be passed by the government, but would it be the real solution? Will the Canadian people accept drastic controls under the conditions existing? They worked relatively well during the last war, but they were also highly criticized as I said a few moments ago. The people do not like to be pushed around by too many governmental restrictions, at least not the Canadian people, unless there is a national emergency.
I have no doubt there are many measures that could be applied which are within the power of our people, if they are willing to put them into practice. I know I shall be criticized for some of the statements I am going to make now, but I am speaking my mind sincerely and honestly as a Canadian citizen. There are certain measures which people may be willing to practise under dire circumstances which will perhaps prove to be

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a deterrent to the high cost of living. If labour, for instance, were willing to increase the length of the work week by ten per cent from forty to forty-four or forty-eight hours, and I say that deliberately, it would increase the national output by eight or twelve per cent. No matter what one may say about shorter hours with the same take-home pay, that does not increase national production.
Mention was made this afternoon of the high cost of farm implements. These implements do have a high cost but the farmer also has to pay about three times what he used to pay for hired help. Even during the haying season or the crop season most of the men who used to work on the farm will not work there unless they get the forty hour week. They will not work in the rain-I do not altogether blame them for that, but they will not work any more than eight hours no matter what the condition of the hay may be. They will not work after six o'clock either. All this has increased the farmers' cost of production. The labour unions would do well to think about this principle, too. Three years ago I was at a party in the home of one of our national labour leaders. It was mooted at the time that they might have a strike in the General Motors plant at Oshawa. Two prominent leaders were advancing an argument that even if the men did get an increase of fifteen per cent in their wages that would not increase the cost of production of those automobiles. I told them that I did not want to enter into a discussion, but even a labour leader could not make me believe that when wages are increased in an industry like the automotive industry or on the farm or in any other industry by fifteen per cent, the cost of production will not increase by that amount. You cannot get away from that simple principle of mathematics.
I am not against what labour has done. During the last war labour and its leaders did a magnificent job. We do not want to see the old days return. In my youth while working in the lumber camps in the province of Quebec I suffered from poor labour conditions. I do not want that to happen to my young brethren in the northern part of the province today. At the same time every citizen of Canada, including the labour union leaders, the farmers and the professional men, all have some duties to perform under present conditions. We need more consumer goods to absorb the increased purchasing power. Of course, economically speaking, the best results will be obtained from the workers producing more by working harder and more efficiently. They did that during the war, and they do that most of the time without any increase in pay. All 
the extra people, all the extra hours that we can get to increase our productivity are going to help reduce the high cost of living; that applies to every citizen in this country. There are certain conditions which attach to this principle, the first being that the extra wages should not go straight into the spending stream. I could give some lists as to how we are spending at the present time. It is true that they have a right to do it, but so far as our economy is concerned it is not the principle our forefathers were practising. For instance, there is the attendance at movies. I go there myself, and I have no regret on that score. Take the man who is spending money on liquor or consider the amount that is being spent on tobacco. I just mention those facts so that the house will realize that, as the leader of the opposition and the other party leaders said this afternoon, those who are living on a pension or with set incomes are no doubt badly hit, but generally speaking our citizens are reasonably prosperous.
I was speaking to some lumbermen in my section during the Easter recess. During last winter some of them earned from $12 to $16 per day. They are spending money and they have the money to spend. Take the men who are working in the big mills in Kapuskasing. I believe they earn something like $2 per hour. They are not feeling the effects of the high cost of living to the same extent. We are not all in that fortunate position, and to that extent I agree with what has been said. The leader of the C.C.F. party mentioned one or two particular cases in which some people were in dire circumstances. When the leader of a party takes the trouble of citing one instance in which the family is suffering-I admit that should not be tolerated-I believe he is not being fair when he does not give the other side of the picture. I can give that picture. Since the last war many of the people in my constituency have started little grocery stores or restaurants, small enterprises like garages, et cetera, with small amounts of capital. Today they are out of the red and some of them are worth $10,000 or $20,000. This picture can be repeated from coast to coast. We realize that, as the leader of the C.C.F. party said this afternoon, there is some suffering. I could cite some very bad cases myself, but it is not the general situation. Perhaps it is not the fault of the father or the mother, but in some cases it may be the fault of one or the other. Generally speaking, people who are healthy and who have a good occupation are not feeling the pinch as they did in the period 1930-35, and they certainly do not want to go back to those times.

We want to increase the supply of goods so that production will increase more than the demand. Ta:xes will play a part in this, but they cannot be a cure-all and it is not a real remedy. Our good Minister of Finance (Mr. Abbott) has received a lot of publicity during the last few months about the terrible budget he is going to give this house tomorrow night. He is responsible for the finances of this country. Since I do not know that I shall have another opportunity, I am taking this occasion to compliment him for the good job he has done as Minister of Finance, a very difficult responsibility indeed.
It is recognized that there are drastic ways of curbing inflation, and that they are effective. There is practically no inflation in Russia, but do we want our government to copy the Russian method of deterring inflation? I well recall that only about three years ago we heard of an order given by the Russian government which meant a loss of forty to fifty per cent to the citizens in that country of all the bonds that they had bought during the war. We do not want that to happen in Canada. In Russia all the goods are rationed. They have very little butter. They have practically no meat, but they have many guns and aeroplanes. We know that, and we have to make some sacrifices to meet that threat. Surely, we do not want this parliament to copy the attitude or attempt the methods that Russia has adopted to deter inflation. Surely, we do not want that to happen here. What a marvellous gesture it would be for example

I speak only for myself in this case-if I forgot the interest on my bonds during the next four or five years. I hope I have the courage to do it, and if it was generalized no doubt it would be helpful in aiding in solving inflation.
What about management? Up to the present time our people have had confidence in the Liberal party because we believe in the free play of supply and demand. In the election of 1945 there were no faux-fuyants so far as our policies were concerned. We went to the Canadian people and told them we would gradually remove controls once the war was over. We have done that and the people voted for us in 1945. They voted for us again in 1949 because they had confidence in the principles of Liberalism. But at the same time, did all the manufacturers, did all the wholesalers or the retailers play fair with the government, or our present system and way of living? No doubt there have been some cases where there have been exorbitant profits that have not been warranted, that were unfair to their customers; and unless they mend their ways the government must of necessity to some extent step
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in and stop those activities and some of those excessive profits.
What about the wholesalers? If tomorrow they will say we will accept 10 per cent less gross profits, that would be a marvellous and helpful gesture. What about the retailers in the same way accepting 5 per cent or 10 per cent less, always having regard to the losses they may have in collection and general expense. These are matters we could explain, the same as I did in my own section, to make the people realize that they cannot expect the government to settle alone by itself the high cost of living at the present time but that we must all put our shoulders to the load. Even in peacetime we cannot completely rule out controls. There are limits to fiscal and monetary policy, and no democratic government can do more than is warranted by the active support of its people.
I was in my home town a few days ago and I saw one man buying twenty cases of sweet biscuits. That was hoarding. I know that some people bought sugar at the beginning of the war around 1940 and still have some left. That also was hoarding. I was told by a storekeeper in. the drygoods business, an excellent and alert businessman, that at the present time the retail trade is buying as much as they can because they are afraid the price of men's clothing and of women's clothing will go up after this coming budget. You read in the newspapers a few days ago-I do not know how true it is; I read it myself; that is all I can say about it-that in British Columbia some clubs there bought some liquor to the tune of hundreds of thousands of dollars because they feared that as a result of the budget tomorrow there would be an increase in the excise tax on liquor. These are examples of things that the Canadian, people do not want to see done generally at the present time or in fact at any time. It is not playing the game with our country. It is not playing the game with themselves either.
This is no time for any businessman to think that he should get all he can while the getting is good. It is no time for the labour union leader to think his union should get all that it can while the getting is good. In that leadership there are good men who realize the seriousness of the situation. I do not want to believe some of the headlines that I saw on Friday and Saturday when information came out from the bureau of statistics to the effect that the cost of living had increased by 4 points or more. They said that we were going to have some labour trouble in Canada. That is not the kind of leadership they have given us during the last seven or eight years. It was better leadership than that. If they have grievances, they should present them to

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the Canadian people, through their government, in a practical way, in order to be listened to by Canada as a whole.
This is no time for the man with money to think that he has the right to hoard and to bid for scarce goods, letting the devil take the hindmost. In doing so, they are all inviting inflation, inviting controls and, perhaps, unwittingly working for the communists. Again I repeat what I said before. There is no doubt that the high cost of living that we have at the present time is to some extent playing into the hands of Joe Stalin and into the hands of international communism, because they can point out what are faults in the economy of the capitalistic system and if unchecked may be conducive to bankruptcy. Again I repeat that the remedy lies with the government and also with every one of our citizens. We all have serious obligations to discharge on that score.
Our people are made of better fibre than that and, as in all times of crisis, they will rise as before to the occasion; and by the help and co-operation of all, they will surmount this difficulty in the same manner and in the same spirit as that they so readily demonstrated during the last two great wars, which gained for us the admiration of all the nations that were in a position to know of our accomplishments.
Again I repeat that we should always remember this. A country like Canada, which of necessity needs world markets for our great exports, cannot entirely control the cost of living. How many pounds of tea do we produce here in Canada? Tea is high in price at the present time, but we have nothing to do with the price of tea over the counter at the moment. How many pounds of coffee do we produce here in this country? Not a single pound. We have to buy it from South America and the South Americans will not accept dictation from Canadians with regard to the price of coffee, no matter how much they like us; we have to accept their quotations. These are matters of supply and demand, of interchange between countries of the world in which one trader cannot dictate to the other in the matter of prices. The same thing applies as forcibly as I mentioned a few minutes ago to the sales that we make to all the nations of the world, for which we get much higher prices than we did six, seven or eight years ago. We cannot and will not put embargoes on our exports at the present time. We still need United States dollars. We want the export markets to be wide open to us. We need to keep our balance of trade. These are necessities, and the leaders of this country must recognize them, and to interfere with them would prove disastrous.

I appreciate this opportunity which has been given to me to make these statements. I made them sincerely and I spoke from the heart. I know that in some sections what I have said will not be popular, but I believe it is my implicit duty to give expression to these thoughts, which I believe are shared by the people I represent at the moment.
I always very much admired the great artistry-I believe that is the proper expression-of the Canadian parliamentary system which is based almost entirely upon the British parliamentary system, with all its common sense and safeguards. Today, on the motion to go into committee of supply, opportunity was given to hon. members to speak on an important problem on which no doubt we shall spend quite a few hours. Buit I believe this is the time and place to compliment the previous speakers-the leader of the opposition and the leaders of the other parties-for expressing their opinions in a clear-cut and forceful way, although you could tell that they all realized the seriousness of the situation. The leader of the opposition was not entirely drastic in his request for controls. He did not make any such plea. We do not want absolute controls that will cut all across the economy. He does not want that because he knows it is not practical. From 1930 to 1935 I sat on the opposition benches and I saw from there the efforts of a fine man, the late Lord Bennett, who was caught in a situation that no human being no matter how gifted he might be, no parliament or no nation could have solved1. I refer to the depression. For five solid years that man must have worked an average of sixteen hours a day. He did the best he could under the circumstances. But sometimes there are certain problems that are outside, bigger and beyond the orbit of a parliament or of a nation.
Today I do not believe that many Canadian people think that we can, as the leader of the C.C.F. said, roll back the high cost of living. You cannot roll back the high cost of living at the present time as you roll back a 20-foot log. You cannot do it in that way, unless you take some drastic measures which the Canadian people will resent for the next decades to come. You must use the system that you have at the present time, try to comprehend the mentality of the Canadian people and in close co-operation with them try to do what is best for them and1 the nation as a whole. We all realize that unchecked! inflation would be calamitous for this country. It is a dangerous issue. The leader of the C.C.F. party made it quite clear from the history of what happened to Germany and what happened to other nations.

We do not want that to happen to Canada. We must always remember this. The government does not deserve to be criticized if they are looking closely at what is happening in the United States, and at their experience with control, under present conditions. Perhaps it is not working as they would like to see it work, but I have no doubt it is doing some good. Already the government, through the good offices of the Minister of Trade and Commerce (Mr. Howe), has looked after some control of commodities in short supply. He has done a good job on that score. Let us take, for example, the buying of automobiles: there are some restrictions today; you have to pay 50 per cent of the purchase price. That is also a step in the right direction. With all these matters up for discussion in the house, I believe it is our implicit duty to tell every one of our constituents that parliament is fully alive to this situation but that it is also fully aware of the legacy which has been imposed upon us and which we are not asking for and which is certainly not of our own making. If the great hopes we had in San Francisco had been fulfilled, if at the present time there were no two worlds, if we had communication as we have between businessmen and had friendly diplomatic relations with Soviet Russia and her satellites, how different the situation would be at the present time- undoubtedly fruitful it would be to allin offering amendments to the motion to go into supply I sometimes think that hon. members go too far. I believe it was only two years ago that the leader of the C.C.F. party offered an amendment to the motion for supply in which he deplored the unemployment situation at that time. We realize that there were signs of unemployment, but most of it was of a seasonal nature. At the same time the discussion was a good one. Hon. members will recall the dire calamities the hon. member suggested would fall upon the Canadian people. He talked blue ruin at the time. In my view that was not the proper way to discuss unemployment.
I must say that this afternoon the discussion was somewhat more elevating. Hon. members who spoke seemed to be trying to suggest ways and means whereby a solution would be found-because it must be kept in mind that no party, no matter what it happens to be, could take the credit to itself for getting a solution which would be reasonably satisfactory in settling to a certain extent the condition of inflation and the high cost of living now prevailing.
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Mr. Depuly Speaker:: Order; the hon.
member's time is exhausted.


Mr.   Bradelle@: I was going to refer to another resolution that was moved four or five years ago by the hon. member for Melfort (Mr. Wright). He is a good agriculturist and a good member of parliament. Upon that occasion he moved an amendment to the motion for committee of supply in which he said that, in view of the high cost of farm implements, farmers could not afford to buy them, and that they were not receiving a sufficient amount for their crops. Most of his fears expressed at that time did not materialize.
Let me say to the leader of the C.C.F. party that those of us in the Liberal party are free to vote according to our conscience. We have good reason to follow our leader because at the time of the last election I maintain he received a national vote throughout the length and breadth of this country. Again, with the country facing difficult conditions, the people realized that the future of Canada for the next three or four years is in good hands. So far as I am concerned, I will do all I possibly can to help everyone, and to help the government to see that the proper measures are taken whereby justice and fair play will be given to every member of our population.


Mr. George H. Hees (Broadview):: Mr. Speaker, when speaking in this house on February 8 last, as recorded on page 209 of Hansard, I said that the spending of $5 billion on our defence program would cause an inflation which could only be kept in check by applying very stringent measures. The control measures I proposed were:
(1)	Over-all price, wage and rent controls;
(2)	Fiscal and monetary measures;
(3)	Control of distribution and allocation of materials.
I made those recommendations only after a very thorough study of the report of the commission on prices, which had been set up by the present government after the last war to examine the causes of inflationary pressure, and the means by which those inflationary pressures could be controlled.
The measures I advocated are the same measures which this present government has never ceased to claim operated with such tremendous success during the last war. They are the same measures which Mr. Ilsley claimed, when speaking ini the house, had saved the taxpayers of this country $12.50 for every dollar expended in operating the controls.

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Therefore I find it difficult to understand the government's reluctance to bring in the measures which it claims it operated with such success during a similar period of inflation, at the time of the last war, and which it claims saved the taxpayers such a tremendous amount of money.
While speaking on February 8 I pointed out that if controls were not imposed right away, the cost of living would increase at an ever-increasing rate. The increase in the cost of living during the past two months has more than borne out that prediction.
Before the present session opened I talked with a man who had held a very important position in the wartime prices and trade board. I asked him what, in his opinion, would be the time required to set up the machinery, and to assemble the personnel, that would be necessary to handle price and other controls. He replied that it would require between three and four months.
For that reason, while speaking in the house on February 8, I strongly urged the government to set up the machinery that would be needed to handle price and other controls immediately, so that our defence program could proceed without undue hardship to the people of the country. I pointed out that prices had already risen considerably, in anticipation of controls, because there had been intimations from the government at various times that controls were on the way. I pointed out, further, that every day the imposition of controls was delayed, prices would continue to rise.
The government disregarded completely all the suggestions made at that time to set up the machinery that would be required to handle price and other controls, with the result that we have lost a vital two months. During that time, the cost of living has risen a phenomenal 7 points, with an increase of 4-5 points having taken place in the last month.
During that two-month period, producers have continued to boost their prices in anticipation of the application of controls; and each month from now on they will continue to boost their prices still more, to make sure that, if a roll-back of prices should be applied, they will be "all set", as the Minister of Trade and Commerce (Mr. Howe) has so aptly described what he knows is going on from one end of this country to the other.
Owing to the unwillingness of the government to act, we are still a minimum of from three to four months away from having the machinery that will be needed to handle price and other controls. This refusal on the part of the government to take steps to stop this runaway inflation is causing tremendous

hardship to pensioners, and people in the low income groups. I say it is a callous disregard of the needs of the people.
Therefore once again I strongly urge the government to set up the machinery that will be needed to handle price and other controls now, so that the cost of living can be kept within reasonable bounds. Even if that decision were taken today, we must remember that we would still be from three to four months away from having the machinery we will need to handle price control, without which we cannot hope to control prices and keep the cost of living within reasonable bounds. The government therefore must act now.


Clarence Decatur Howe: Mr. Speaker, it is regrettable that this debate should have taken place the day before the budget for I am sure that my colleague, the Minister of Finance (Mr. Abbott), will in the course of his budget speech deal at length with the problems of rising prices and inflation. Since you have permitted the debate to take place there are a few comments that I feel should be made.
The government is just as concerned about rising prices and inflation as are the members of the opposition who have spoken. There is perhaps no problem before the democratic countries today more important than inflation, for inflation can undermine the very foundation of society. It is the duty of every government to take such measures as lie within its power to prevent the forces of inflation from gaining the upper hand. Moreover, the Canadian government has a positive policy to control inflation. I suggest indeed that no government is doing more of a constructive nature to relieve inflationary pressures than the Canadian government. Why then has the cost of living been rising?
Let us look at the facts. Prior to the outbreak of hostilities in Korea the cost of living had been declining. Between August 1949 and January 1950 the index dropped from 162-8 to 161. Between January and May 1950 the index rose by as much as it had declined and a bit more. In May 1950 it stood at 164. Then came the Korean episode and a steady rise which in ten months has resulted in an increase of nearly 16 points or about 10 per cent in the cost of living index.
In order to understand what has been taking place it is useful to break down the index into its component parts. First is food. The cost of food accounts for no less than 57 per cent of the increase which has taken place in the cost of living index since

last May. Now then which of the food items account for most of the increase? Again the answer is pretty clear. A large part, although of course not all, of the rise is accounted for by beef and butter.
Those are important facts because what the opposition members are really urging when they suggest that price controls should have been in effect is that the prices of these food products should have been under control. To be specific, one of the things they are really suggesting is that the export of cattle to the United States should have been restricted. That is the only practical way I know of of preventing the price of beef in Canada from following the price in the United States. Are members of the opposition really prepared to advocate that the government restrict the movement of Canadian cattle to the United States to markets which Cana-' dian farmers have built up and fostered for so many years? Would it be in the best interests of this country to take such action with all its implications in connection with our trade relations with the United States and our foreign exchange position?
I next take fresh vegetables which accounted for a substantial part of the rise in the cost of living.


John George Diefenbaker: What percentage?


Clarence Decatur Howe: I shall tell you in just a few minutes. During the last war we did very little about fresh vegetables because the prices varied so much from season to season. I doubt whether the price control of fresh vegetables is a practical proposition. I could go further down the list of foods, but I think I have said enough to illustrate my point. In general it would have been impossible to prevent a substantial rise in the price of food and consequently in the cost of living without taking measures which would have been either impractical or necessitated drastic interference with traditional markets for farm produce, or which would have required large subsidies.
I now come to the next group in the cost of living index-clothing. This group accounts for some 12 per cent of the recent rise in the index. The largest clothing increase is to be found in the prices of two chief textiles, cotton and wool. The price of wool has more than doubled since Korea and the price of cotton has risen by nearly 50 per cent. These are prices upon which Canadians have virtually no influence. They are established in the markets of the world by world forces of demand and supply. The simple fact is that the demands for cotton and wool throughout the world have risen more quickly than the supply. In one way or 80709-1121
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another the demand had to be cut down and prices were bound to rise. Fortunately the supplies of synthetic fibres have been rising rapidly, both in Canada and elsewhere, or otherwise the clothing situation would have been much worse. We shall certainly have to depend more in the future than in the past upon these new types of fibres in order to meet increased world demand for clothing.
The rent component in the index accounts for six per cent of the rise in the index. Since May the average increase in rent has been substantial, but not as great as some people thought would be the case. Rents were held down very tightly during the war and it was inevitable that in the post-war period there should be a substantial increase. The federal government could not have justified a policy of holding rents at their pre-war levels indefinitely.
Perhaps I might conclude this brief analysis of some of the main causes of the recent increase in the cost of living index by examining the 4-5 point increase that took place in February and that precipitated this debate and forms the basis for the opposition amendment. Of that increase, 66 per cent was accounted for by food, 10 per cent by clothing, five per cent by rents and 19 per cent by other items. Again food was the principal item. In fact 50 per cent of the whole increase in the cost of living index during February was accounted for by meat, butter, fresh vegetables and eggs.
The food increase is not an indication of runaway inflation, as has been suggested by opposition speakers. A preliminary survey of March prices indicates that the index will hold about even during March, or at the worst show an increase for that month of not more than one-half of one per cent. I am not suggesting that farm prices are too high or that recent increases in farm prices are unjustified or that all of the increase in the cost of food is due to higher farm prices. As a matter of fact it has been suggested in this debate that there is a wide discrepancy between farm prices and retail prices, but the statistics do not indicate that result.
Comparing price increases for the period March 1950 to March 1951 we find that the retail prices of fresh meats have risen by 24-8 per cent whereas the wholesale prices of the same meats have risen by 31 per cent. In other words, the wholesale price has risen to a greater extent than the retail price. The retail price of beef steers has risen 31-5 per cent whereas the wholesale price has risen 39-2 per cent. In the case of fresh pork the retail price has risen 21 per cent whereas the wholesale price has risen 22-8 per cent.

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In the case of eggs, in that period the retail price has risen by 32-7 per cent whereas the wholesale price has risen by 30-2 per cent. In the case of milk the retail price has risen 6 [DOT] 1 per cent and the wholesale price has risen 3-2 per cent. Therefore in general the rise in the wholesale price has been somewhat greater than the rise in the retail price for the items that I have mentioned. All I am suggesting is that to keep the cost of living from rising it would have been necessary to put firm controls on farm prices.
These are the facts, Mr. Speaker, about the recent increases in the cost of living index. They illustrate some of the implications of price controls which are being so ardently advocated by both the official opposition and the C.C.F. party. As a result of its experience with price controls- during the last war, the government knows what is involved in- price controls. It knows how much people have to be regimented and pushed around if price controls are to work successfully. I find it interesting that I have met no one who had administrative experience with controls during the last war who believes that the Same type of controls would be effective or desirable in the present situation. If anyone else knows of anyone who has a different view I would be very interested in knowing his name.
The opposition of course is very vague about the kind of controls it would put into effect. As the leader of the opposition (Mr. Drew) put it, they must be moderate and flexible controls. They must be fair to everybody and hurt nobody. The plain fact is that no such controls would be worth the paper they were written on. The government is not going to put into effect controls which do more harm than good. I have said this before and I say it again. We are not going to put widespread controls into effect just to give the appearance of doing something. We are not going to put widespread controls into effect unless they can be made to work, can be enforced and mean something.
The leader of the opposition quoted a statement or two that I made a year or two ago. Perhaps I might quote a statement that he made on November 24, 1949, as recorded at page 2158 of Hansard. I do so because I believe it is a good thing to keep in mind at this time. I am sorry that he has changed his viewpoint. He said:
I was Interested ... to hear a reference to competition and the necessity for competition to keep prices down. That is what we believe in. When we talk about a free economy and free enterprise, we are asserting our belief that the individual man or woman in his or her home in this country benefits most from a system which by competition itself
[Mr. Howe, j
will improve quality and lower prices. That has been the advantage of this system; and it is because of that system that we have on this continent today the highest standard to be found anywhere in the world.
He was referring to the standard of living.


Gordon Knapman Fraser: Well stated.


Clarence Decatur Howe: Well stated, and just as true today as it was at the time it was made.


George Harris Hees: A different kind of economy.


Clarence Decatur Howe: It is a great pity that my hon. friend changes his policies so often.


George Alexander Drew: Mr. Speaker, on a question- of privilege, I would remind the minister who is speaking, if this actually is of his own preparation, that there was not an actual defence program in force at that time. The defence program had not started.


Clarence Decatur Howe: My hon. friend can never be a gentleman. That is quite apparent.


George Alexander Drew: What I said was that the defence program had not started then. If the minister had been listening to the argument he would have heard me put forward exactly the same argument today, and I then pointed out that the defence program had completely changed the picture so far as the necessity for dealing with this situation is concerned.


Clarence Decatur Howe: That reminds me, Mr. Speaker, that in 1945, when the war was still on and inflationary pressures were at their worst, the leader of the opposition party demanded that all controls be abolished immediately.


An hon. Member:: You were not here then, George.


Mr. Fulton:: Can you give us the quotation on that one?


Clarence Decatur Howe: I would be glad to. I have the clipping. It was made by Mr. Bracken in a speech at Toronto. The leader of the C.C.F. party has a solution. He says that before freezing farm prices we should call together the leaders of the farm movement and work out parity prices. I think his idea of parity prices is considerably higher than the present prices except in the case of meat. He also suggests that we should call together the labour leaders and work out a system of wages. I understood again that the wages that would be worked out would be higher than the present wages. If that is the path towards keeping the cost of living down I will leave it to the leader of the C.C.F. party. I do not believe that conferences of that kind, and attempts to adjust prices and wages before instituting effective controls, would be a constructive method of approach to the subject of control.

Every country about which I know has had to accept some increase in the cost of living in recent months. In the United Kingdom, where controls have been more extensive than in perhaps any other country, the cost of living has been rising faster than in Canada. The United Kingdom government found that it could not go on paying higher and higher subsidies indefinitely. I believe that, whereas the cost of all retail prices in Canada rose by 15 per cent in the year 1950, the increase in the cost of all retail prices in England was 23 per cent, and I believe in Australia it was still higher. I know that the Minister of Finance (Mr. Abbott) intends to give a good deal of data along that line in his budget speech and I will not undertake to anticipate the statement he will make.
In the United States, where price controls were put into effect a few weeks ago, the cost of living has continued to rise. In fact, as I understand the United States price control system, virtually all increases in costs are to be passed on to the consumer by a system of margin or mark-up controls. Of course, as hon. members are aware, most food items in the cost of living are not yet under effective control in the United States.
I do not wish to leave the impression, however, that the Canadian government has a defeatist attitude towards inflation and rising prices. On the contrary, we are fighting those dangerous and disrupting tendencies where we think the fight can be carried on most successfully, namely, in the field of fiscal and monetary policy and credit control, supplemented by certain direct action about which I shall have something to say later.
But Canada cannot insulate herself completely from a world-wide inflationary movement in prices. In fact Canada is less able to do so than most countries because of our dependence upon external trade. As I listened to this debate today, I wondered how the official opposition could reconcile its demands for controls with its attitude to the extension of the Export and Import Permits Act. I can assure the house that general price controls are not possible without very extensive and arbitrary controls on exports and imports.
It has been suggested that we could keep the cost of living from rising by paying subsidies. Perhaps that is so, but I suggest that the payment of subsidies is in itself not antiinflationary. In fact, unless the subsidy bill is paid in full out of taxes on the great mass of the people, subsidies are inflationary. They add to public spending. I do not think that the people of Canada want to be faced indefinitely with taxes of hundreds of millions of dollars a year to pay subsidies. If we were
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at war and had good reason to believe that the situation was of a very temporary character, subsidies might be a useful device as part of the over-all system of price control.
I suggest subsidies are less appropriate under present circumstances.
Before concluding I should like to make a few comments about the supply position, for it seems to me that there has been a good deal of unnecessary concern about coming shortages, which has led in turn to unnecessary price increases.
There are no real shortages of civilian goods. Now and again there have been rumours of shortages, and when these resulted in a scramble to buy beyond immediate needs normal commercial stocks have been reduced below a safe operating level in some localities. Members will recall the run on supplies of sugar last August. Nails have given us trouble. Recently the same process began with diapers but fortunately was quickly stopped. In these cases what was lacking was not supplies but confidence in the future availability of supply.
Every time a run on available supply occurs it tends to create abnormal buying back through all stages of distribution and production, right to the raw material. This sort of thing pushes prices up. Confidence in future supply is so important that it seems timely to explain what steps have been taken to forestall the sudden appearance of any real scarcity of goods at the retail level.
Early last autumn it was apparent to us that meeting defence demands for nylon could make difficulties for the hosiery industry and other users. With the co-operation of the producers, nylon yarn was quietly and immediately put under allocation and a reserve was built up before defence contracts were placed. Production under these contracts has reached full stride without creating any additional demand on supplies available for civilian uses. There have been no queues at stocking counters and no panic buying as a result.
We are in constant consultation with industry and the distributive trades to discover any threat of future shortage far enough in advance to permit its correction. For instance, we have had to adjust contracts for certain fabrics to forestall a scarcity of work-clothing materials, and have assured a supply of steel for the fastenings. Now there is no reason for retailers to press for larger and quicker deliveries and so apparently create a scarcity of work clothing. The makers are maintaining their output at a high level. We have to take action quickly in order to kill such rumours.

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In other cases we have resorted to export control to protect the flow of material going into Canadian production, as in the case of waste paper, rags, scrap metals, benzol and glycerine. An exchange of quotas with the United States has been arranged in hides and skins to maintain our normal production of leathers. In other cases we have assisted expansion of Canadian productive capacity, as in the case of rubber.
We cannot escape having to pay the going world prices for imported raw materials but we can at times arrange for greater supplies of cheaper substitute materials. Wool prices are very high but rayon can be used in a considerable degree to blend with wool without sacrificing quality. The rayon sells for around 43 cents a pound, while fine worsted tops sell for around $4 a pound. We are giving every assistance possible to increase our production of rayon and our foreign suppliers have also been helpful. As a result, in filling our defence needs for worsted fabrics we shall not give reason for any panic buying by the public. The housewife who searches a little further and buys a little better will not by any means feel the full effect of high wool prices.
Supply of steel is our most serious problem and every move to expand Canadian production of raw materials or to ensure adequate services, such as power supply and transportation, involves steel. Here we have to plan our moves in collaboration with our friends in the United States, which country supplies a large part of our requirements, particularly for special mill forms. We are now planning to program steel necessary to maintain production of agricultural machinery just as previously we have programmed steel for freight cars, locomotives and lake shipping.
Generally speaking our problems with steel are not reflected at the retail level, but we are in consultation with industry regarding simplification of the construction of durable consumer goods such as washing machines, refrigerators, hardware and plumbing supplies. The purpose of simplification is to maintain production while saving scarce materials. The objective is to have a manufacturer who has been making perhaps three dozen lines now concentrate on one-third of that number and still meet all the real needs of the market. It is conceivable that by doing so he may also save costs since he will gain a higher volume of output in any one line. There is no better brake on prices than adequacy of supply. Even this will not work over a short term, however, if manufacturers, distributors, and the public are panicked into buying out of fear of future shortages.

In fact, there are no serious shortages of ordinary consumer goods in sight. Defence expenditures are substantial and will be substantial but they do not represent nearly as large a drain upon manpower and materials as an all-out war. I am sure that we can get along quite comfortably as consumers and still engage in a substantial defence effort. A few things may in the course of time become unavailable or relatively scarce, but standards of living will remain high. Unless all-out war comes, Canadians can continue to live well.
The greatest contribution any Canadian can make to stop inflation is to avoid panicky buying and to produce as much as possible. All of us should be thinking in terms of working harder; of working longer hours, rather than shorter hours. There is too much of a tendency, it seems to me, for people to look to government for solutions to their problems. Governments can help and should help in dealing with inflation; but consumers, labour unions, farm organizations, and businessmen can do much by their own efforts to reduce the pressures that lead to higher prices.


Mr. J. W. Noseworihy (York South):: Mr. Speaker, I listened with a great deal of interest to the speech of the leader of the official opposition (Mr. Drew) and the speech just completed by the Minister of Trade and Commerce (Mr. Howe). One feature about those speeches was striking, and must be a bit confusing to the country. It is the complete exchange of positions on the subject that has been made both by the leader of the opposition and the spokesman for the government. One would think the Progressive Conservatives had now become Liberals and the Liberals had become Conservatives following the old Conservative line. The speech by the leader of the opposition reminded me of some of my early religious training. The church to which I belonged strongly believed in sudden conversion, and even condoned deathbed conversion. I am sure that those of us who are interested in this problem, those of us who have been advocating price controls, will welcome the conversion of the Conservatives, even though that may be a deathbed conversion. What appears to me, and to most of the people of the country, as the gravity of the situation, has already been set forth in this house. From the minister's speech it is quite evident that the government does not share the opinion of the people in this country that the inflationary situation is serious. I think I could do no better in emphasizing the seriousness of the situation than to put on the record a statement issued on April 4 by the president

of the Trades and Labour Congress, Mr. Bengough, and the president of the Canadian Congress of Labour, Mr. Mosher, when the last price increases were first published. They say:
The latest rise in the cost of living index, 4-5 points in a single month, is by far the biggest for any month since the war. It is the fourth increase in a row, and each one has been bigger than the one before. The inflationary snowball is rolling faster and faster, and getting larger and larger. The index is now 16 points above last year, and over 60 points above 1945.
Every one of the sub-indexes went up during the month.
While it is true, as the Minister of Trade and Commerce pointed out, the highest increases were in food products, nevertheless every one of the sub-indexes went up during the month.
Food, the most important of the whole lot, went up by just over 9 or 9-5 points. Food is now almost 30 points above last year, and 100 points above 1945. It is rather interesting in this connection to note that in the past those Liberal speakers who have defended the present rise in prices, and who have opposed any measures of price control, have been inclined to blame the wages demanded and received by industrial workers for the higher cost of living. A new line was taken by the Minister of Trade and Commerce tonight when he indicated that the sudden rise in the price of food is due to the prices which the farmers have been receiving for the cattle they have been exporting. Labour cannot be blamed for the phenomenal rise during the month of February, since there were certainly no increases granted in the month of February that would account in any way for the rise which took place. These leaders say there is no use blaming it on wage increases.
There were no increases in February which could begin to account for a 4-5 point rise in the index; on the contrary, there is not the slightest doubt that wage increases during the month wholly failed to keep pace with the rise in living costs. Workers' standards of living are being drastically cut, and the position of pensioners and others on small fixed incomes is even worse.
That is the situation as seen by the labour leaders. In his closing remarks the minister appealed to Canadians to assist in curbing the rising cost of living. He called upon them to refrain from panic buying. He called upon industrial workers to work longer hours, to work harder and to produce more goods. I think what is true is what the minister quite clearly indicated, that today there is no real shortage of civilian goods. The minister himself made that statement. Some people with whom I have been discussing this subject, and who are in close contact with what is actually happening, tell
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me that the warehouses in this country are filled with consumer goods today to an extent that they have never been filled before in history. They are bulging with consumer goods that are being stockpiled, because the buyers have been hearing the government indicate from time to time that price controls, in some form or another, are likely.
As has already been pointed out tonight, every day that the government delays taking some effective measures to check the rising cost of living is simply adding to that rising -cost. Mention was made in the passage I put on the record of the effect upon the workers' standards, pensioners and others on small fixed incomes. In my opening remarks I called attention to the reversal of position which is taken today by the Liberal government as compared with that taken in 1941 when we were faced with a similar situation. I should like to call the attention of those Liberal members who are refusing to take any effective measures that have had any degree of success in stopping the rising cost of living, to a few words of the late prime minister in his famous broadcast of 1941. Speaking of the conditions which faced the country then, and they were similar to those which face us today, he said:
Rising prices unless controlled will make it more costly and therefore more difficult to finance the war.
The Minister of Trade and Commerce referred to the fact we are not now at war, and implied that controls could not, in his opinion, be effectively introduced. I believe what is true is that our defence program this year will cost this country just about the same as our war expenditures in 1941 when Mr. King made this statement. He went on to say:
Rising prices, unchecked, will spread confusion and uncertainty in industry and trade.
It is doing that today. No sooner was this increase announced on April 4 than trade union leaders all across this country were indicating that their unions were being called together to present new, increased demands to their employers. Unless the government can take some effective steps, we are now heading for a whole series of increased demands from industry right across this country. I continue to quote:
They will hinder-
That is, rising prices.
-production and the proper distribution of supplies. They will make the cost of living rise more rapidly than wages and salaries.
They have been doing that. They will continue to do it. There just is no point whatever in the Minister of Trade and Commerce (Mr. Howe) appealing to the

Cost of Living
industrial workers of this country to work longer hours, to work harder and to produce more, so long as rising prices and profits go unchecked by the government, so long as the industrial workers of this country see that the government is taking no steps whatever to curb rising prices and the spread between the producer price and the wholesale price. The Minister of Trade and Commerce did not give us those spreads. He showed us that the retail price corresponded closely with the wholesale price of most food products. But unless the government can take some measures to see that both wholesale and retail prices bear a closer relation to producer prices in this country, some measure to curb the profits that are being accumulated today, his appeal for voluntary assistance, without any leadership from the government, will go unheeded. I continue to quote from this famous broadcast:
The value of savings will be materially lessened. The result would be hardship to nearly everyone, and hardship in very unequal measure.
This is the effective part of the broadcast that I want Liberal members to hear:
Rising prices-a rising cost of living-do not have the same effect on all households. The smaller the family income and the larger the family, the more serious the hardship imposed. For those with small incomes, rising prices of clothing, food and other necessaries may mean serious hardship, while for those with larger incomes only luxuries and small comforts may have to be given up.
Rising prices thus serve to aggravate the inequalities in society, and to throw the heaviest burdens on those least able to bear them.
There is nothing today from any Liberal speaker from the opposite side of the house that corresponds in any way with the statement made by their erstwhile leader in 1941. It makes one wonder what has happened inside the Liberal party since 1941. Where are the men who supported the then prime minister in the sentiments that were there expressed, in their feeling for the common people of this country? Are there still no members of that cabinet who imbibed that philosophy in 1941 and helped to make it effective? Are there no supporters of the Mackenzie King doctrine still occupying cabinet benches for the Liberal party? What has happened to the men who gave leadership in the application of controls during the war? From the Minister of Trade and Commerce, who had more to do with the imposition of those controls than any other single cabinet minister, we hear that they do not want, for some reason or other, to impose those controls today; that they cannot be effectively carried out; that we are not in a national emergency; that they will not have public support. One wonders at the reluctance on the part of some cabinet ministers who so effectively administered

those controls during the war and who taught the Canadian people to believe in the efficacy of those controls. If today the Canadian people believe in controls to the extent that at least 75 per cent of them are calling for the reimposition of those controls, then no one is to blame but those same cabinet ministers who administered those controls during the war and who preached controls across this country. The people of Canada came to accept those theories which were expounded by the men who in those days administered the controls but who today are afraid of something or afraid of someone; they are afraid to impose controls. They are fearful that they will not have the support of the Canadian people or the backing of the Canadian people in the administration of those controls.
I have already stated that the delay on the part of the government in showing some leadership in checking the rising cost of living is contributing to that rising cost of living every single day that that delay continues. We in this group have consistently advocated the reimposition of necessary controls. I realize that the government now is in a bit of a dilemma. They have dillydallied with this subject for at least a year since the necessity for controls became quite evident. During that year prices have risen to a point where to freeze and control prices at this time would assure the continuance of high and exorbitant profits for many of those who have taken advantage of the situation. To roll back prices would be still more difficult.
No one questions the fact that the government today is facing a serious situation with regard to prices. They are facing it chiefly because of their continued delay for at least the past twelve months in doing anything about it. The longer they delay, the worse the situation will become unless they want to see that balloon, inflation-which we have seen rising constantly and getting bigger and bigger-burst of its own accord. Such a situation might well cause a catastrophe in the economic life of this country. I do not think any of us want to see that happen. The only alternative is for someone on that side of the house to adopt the mantle of their former leader, Mr. Mackenzie King, for someone on that side of the house to pay some attention to the crying needs of the people of this country, for someone in the cabinet to return to the doctrine and philosophy of the Liberal party, and give up some of their conservatism.
We do not maintain that price control is the one and only measure that needs to be adopted to stop inflation. What we do insist on is that it is one of the measures that

certainly now become essential. There is really no need in this country lor us, because of military needs, to have shortages of civilian goods. Unless our military needs become much greater than they are at the present time, we can in Canada produce sufficient to meet both military and civilian requirements. There may be-apparently there are-countries today which cannot have guns and butter at one and the same time. There is no good reason why in this country, if we are given some leadership by the government which was elected to give that leadership, we should not be able to have guns, as well as other necessary military equipment, and butter.
What is true, and what has proved to be true over the past, is that we cannot have guns, butter and exorbitant profits at one and the same time. When the Liberal government is prepared to do something to check rising prices and to listen to the needs of the common people, and to return, as I said before, to the doctrines which they preached across this country for years, then we can get on with the job of producing.


Mr. J. S. Sinnoit (Springfield):: Mr. Speaker, in rising to take part in the debate I would refer first of all to the Montreal Gazette of this morning, particularly to the report of Mr. Arthur Blakely where, in the second paragraph, under the heading "Signal", he says:
As soon as the dominion bureau of statistics disclosed that the cost of living index had risen a record 4-5 points in February, Progressive Conservatives, C.C.F'ers and Liberals raced for the privilege of initiating a commons debate on the inflationary spiral. The reason for the race isn't hard to find. The theory held here is that the public will feel that the party which initiates the debate is the one most genuinely concerned over rising living costs. Hence the feverish haste. C.C.F. leader M. J. Coldwell and the redoubtable John Sinnott (L. Springfield) -


Some hon. Members:: Hear, hear.


John Sylvester Aloysius Sinnott: I must repeat that.
-the redoubtable John Sinnott (L. Springfield) lost the contest. They will take part in Monday's debate. But Speaker Ross Macdonald has assured Opposition Leader Drew that he will have the floor first to lead off the discussion.
Then, in looking over a discussion of business of the house in April 5 Hansard, where there was reference to procedure in asking leave to move the adjournment, under standing order 31, it will be noted that J. S. Sinnott, the member for Springfield, was first on his feet. And it is only now, after waiting for five or six days, that I have the opportunity of having the floor, and sharing in the glory with the leader of the opposition (Mr. Drew), although he had the floor first today.
Just to show that the leader of the opposition made sure that he was going to have 80709-113
Cost of Living
that privilege, I would refer hon. members to page 1641 of Hansard where they will see that he did not even give Mr. Speaker a chance to finish his remarks, before he was on his feet to say:
Mr. Speaker, I trust that the attempt to introduce the motion which you have declared to be irregular at that time will not in any way change the priority, in view of the fact that I have already indicated to you my intention of presenting a motion for the adjournment of the house at the proper time.
While there was a race for it, nevertheless the hon. member for Springfield was on his feet first.


Gordon Knapman Fraser: Out on his feet.


John Sylvester Aloysius Sinnott: I was amused today to hear the leader of the opposition make reference first to the high cost of food. I never heard him say, though, that the farmers were getting too much money. Then he said that the proportion of increase in retail prices had not kept pace with the increased prices to the farmers themselves. I think that is an indication that he would like retailers to have a bigger profit than, they now have.
I want to make it clear that I am not falling for any bait or any attempt by the opposition to lead me to vote against the government in this debate. I want to make clear to the government my opinion in this matter, and I think that, taking a cross section of the country, I can say 1 represent what would be pretty close to the average individual in Canada. I am sure all hon. members will agree that it is necessary to curb the ever-soaring and rising prices.
In looking over the current review of agriculture, with particular reference to records in Canada, we find a larger population with a greater working force earning a higher income than in any previous record in Canada's history. As a result there is now a much greater demand for farm products, especially livestock and livestock products. We find that the volume of exports of farm products has now declined for the first time since 1940, and that there is no longer a Canada-United Kingdom food agreement.
Nevertheless production does not meet with the increased consumption which is taking place in Canada today. This is partly due to the small output of some farm produce, and partly due to the international currency situation. And, as the Minister of Trade and Commerce (Mr. Howe) has rightly said, it is partly due to the export of cattle to the United States.
In spite of the conditions I have described, the demand for agricultural products still continues, and the wholesale prices of farm products at the major domestic markets have

Cost of Living
continued to rise since the end of 1950. Prices to the farmers have improved somewhat, as in the case of cattle but receipts on Canadian markets are not unduly heavy. During 1950 Canadian farmers have realized a cash income of $2,169-3 million. Comparing this with 1949, the income for 1950 is down by 11-7 per cent for the farmers. Parliament was called on January 29, 1959.


Some hon. Members:: Oh, oh.


John Sylvester Aloysius Sinnott: He who laughs last laughs best -1951. Since that time a number of policies have been decided upon to strengthen Canada's defence resources and measures to combat inflation have been announced. The policy of the government is to prevent war, but in spite of this the danger is still great and ever present. On February 12 the Minister of Finance (Mr. Abbott) had this to say:
Let me hasten to say at once, Mr. Speaker, and I am sure I am not revealing any budgetary secrets, that I do not think we have reached the practical limits of taxation. I intend to budget this year for a fully balanced budget which I think will be the fundamental attack on the problem of inflation.
Referring to the general economic controls at the present time, the minister stated on the same day in- the House of Commons:
I do not believe that a system of over-all price control would be either desirable or effective at this time. Make no mistake about it, one cannot go into this thing for any length of time in a piecemeal manner. Controls on any wide scale will mean control of prices, wages, allocations, and the rest.
He then went on to say:
We know how controls work, we know what their limitations are and we will use them to the full extent that we believe they will be necessary.
With this I go along with the Minister of Finance. It is a sound policy, as is also the part of the program dealing with credit restrictions and instalment buying. The government of the day has increased the down payment on many articles and in my opinion it is for the good of the country as a little more thought will be given by the people in their purchases, thus eliminating, wild spending. That had plenty to do with the trend of things, but I notice the leader of the opposition and the hon. member for Rosetown-Biggar (Mr. Coldwell) have had something to say about this. I give the hon. member for Rosetown-Biggar credit for being fair in his remarks. He skated around the all-important matter of prices and wages until he was called to time by the hon. member for Mackenzie (Mr. Ferrie). However, taxes as taxes go are not an answer to the problem of bringing down the cost of living. Taxing is a policy which is very harsh and in my opinion is one of the crudest devices to be used by a government on its people to curb inflation. What we need in this country at
fMr. Sinnott.]
the present time are subsidies on the actual necessities of life such as milk, meat and bread until such time as production catches up with consumption.
I should like to show how prices have risen during the period 1944 to 1950, and I wish to refer to the Canadian Statistical Review in order to give the house some idea of the labour trend between 1944 and 1950. On page 34 of the Canadian Statistical Review will be found the average basic wage for different industries in 1944 and 1950, as follows:
1944	1950
cents cents
Durable goods	
77-9	116-4Non-durable goods	
60-4	99Meat products	
66-2	117-7Leather products	
70	112-2Saw and planing mills	
62-5	106-1Furniture	
58-4	92-1Plant products-edible	
52-9	83-4Pulp and paper	
72	125-5Leather products	
79	112-2Thread, yarn and cloth	
48-4	91-9Hosiery and knitted goods	
46-1	79-4Garments and furnishings	
52-4	78-5Tobacco	
47-4	100Electrical apparatus	
68-6	117-8Steel and iron products	
82-1	122-2Crude, rolled and forged products 76-4	129-1
It might be noted that tobacco products are not essential to the people of Canada, but nevertheless the increases in that industry indicate the labour trend. There is no one in this house who can deny that wages have gone up considerably. They say that liars can figure, but figures cannot lie. I should like to give a few comparisons in regard to canned goods which will give the house some idea of what prices were in 1944 and in 1950. Taking 1939 as indicating 100 we have the following prices:
	1946	1950
Tomatoes 	
136-6	209-8Peas 	
119-7	149Com 	
138-3	183-1Pears 	
104	149
Those figures show that possibly labour has had something to do with the increases which have occurred. Since 1944 wages have increased 38 per cent while the cost of living has increased 35 per cent, according to the latest information we have from the bureau of statistics. Possibly I might say that at this time when there seems to be a shortage of production on the farm it would be proper to try to instil in the minds of many industrial workers the knowledge that the man who works on the farm, especially in the feeding of hogs and looking after livestock, does not have an eight hour day. It might be a good idea if they were to have it instilled in their minds that, in order to bring the cost of living down, by working an hour longer each day and therefore receiving a

bigger pay cheque possibly it would induce the farm boys to stay on the farms a little longer. However, in spite of the fact that most of our C.C.F. friends are always complaining about the cost of living, there is one who actually told the truth here.


John Lambert Gibson: Name, name.


John Sylvester Aloysius Sinnott: I will have to give the hon. gentleman credit. He happens to come from the constituency of Melfort, and at page 1623 of Hansard he had this to say:
. . . those wages have increased from a base of 100 to a base of 218 today.
Then on the next page he says:
The new cost of living index which was announced today now stands at 179-7.
He said that the cost of living index had risen to 179-7 and that wages had increased to 218. Therefore, according to his information, the cost of living has a long way to go yet before the labour unions will have to call meetings for the purpose of increasing wages to catch up with the cost of living. I should like to read a newspaper clipping concerning a policy that the United States government is putting into effect. The heading is, "Truman Signs Long Range Farm Legislation". The article reads:
President Truman Monday signed long range farm legislation which permits the United States government to support prices of most farm products at or near wartime levels. The measure, passed by the present Democratic congress, replaces most major provisions of the so-called Aiken law enacted by the Republican 80th congress. The Aiken law permitted somewhat lower supports for major crops.
That is all I will read of the article.


Donald Methuen Fleming: That is enough.


John Sylvester Aloysius Sinnott: Here is something from a man with whom the leader of the opposition was quite familiar not too long ago. I refer to the Ontario minister of agriculture, Mr. Kennedy. This is what he has to say:
The retailer and distributor get anywhere up to '8 per cent of the price the consumer pays for fruit and vegetables . . .
Bear in mind that the retailer and distributor get anywhere up to 78 per cent of what :he consumer pays.
-while the farmer who raised the food gets the short half of what it brings. Hon. T. L. Kennedy, Ontario minister of agi-iculture, disclosed yesterday. "We are determined to bring into proper proportion the ratio between what the farmer receives for his product and what he has to pay for non-agricultural products," Mr. Kennedy declared. Some change may' be made when the Ontario food terminal market in Etobicoke is opened, he hinted. He said an investigation made at his request in Toronto, November 2, showed certain farmers received 59 per cent of the retail price of their cabbages, 42 per cent on carrots, 22 per cent on celery and 42-59 per cent on potatoes.
80709-113|
Cost of Living
That goes to show that a large portion of what is received for the farmer's produce goes to the middleman. The government should make some effort to see that the consumer is not robbed in this regard. I have several clippings along the same line. They all indicate that the spread between the producer and the consumer is far too much. As the Minister of Trade and Commerce (Mr. Howe) said, many of these boys have been all set for a long time. No wonder it is hard to get farm help after reviewing these reports. Farm boys and girls by the thousand are lured away from the farms to labour in other fields.
I am given to understand that the labour force on the farms at the present time in the whole of Canada is only 18-7 per cent while 26 per cent are in manufacturing and the balance in basic industries. This will give an idea of how difficult it is for farmers to secure competent help. Eighty-two per cent of the labour force over the period of years have demanded more and more wages with the net result that the rise in the cost of living is what it is today. The house which labour has built is now falling around their very own heads. I am very sympathetic to labour and had to work hard myself before coming to this house. Back in 1926- and this is not a laughing matter-I cut pulpwood for $1.85 a cord, built my own camp, cut spruce boughs for my bed, dug my well, hauled in all my supplies seven miles from a railroad on a toboggan I constructed myself, did my own cooking and lived on 50 cents a day. That should be enough to indicate that I have had something to do with hard work. I also recall the days of the 1930's when we milked cows, shipped cream to the city of Winnipeg and received $1.65 for five gallons of cream testing 38 per cent butterfat.


Mr. Maclnnis:: What were wages in those days?


John Sylvester Aloysius Sinnott: I do not wish to go back to those days but it is an indication of what some of us had to go through. However, Mr. Speaker, I do not believe that labour itself is the cause of present-day conditions. The situation has arisen because of their leaders who, in order to save their own hides and positions, are constantly seeking some scheme to keep their members' interest aroused in labour unions. I do not despise legitimate pay for legitimate work but labour must be told the naked truth that 18 per cent of the population in Canada cannot and will not work twice as many hours on the farms without three weeks' holidays with pay, without Sundays off and the many other advantages and conveniences which are to

Cost of Living
be found in the cities. Therefore I say to labour in the most sympathetic way that justice must prevail, and that it is to a large extent because of high- labour costs that the cost of living is what it is today. I think I have made that plain enough. Eighteen per cent of the population will not remain on the farms and work under those conditions for the amount of wages they receive when their fellow citizens in industries in the cities are receiving far more. That is why living costs have risen to what they are.


Mr. Johnston:: That is plain enough.


John Sylvester Aloysius Sinnott: In order to press a point with respect to the curbing of inflation, I must refer to the hon. member for Winnipeg North Centre (Mr. Knowles). I see him in his seat now, and I would not do this if he were not here. I will give him full marks for making an honest effort to have the house follow strictly the rules of Beauchesne. He has been a very aggressive worker in this regard, and I admire him for his careful and studious efforts. However, Mr. Speaker, he seems to have lost track completely of Canada's national aspect, or at least the building of Canada, and has concentrated his efforts on giving everything away instead of building up the country's assets. I am sorry to have to reveal that in my opinion he is public enemy No. 1 as far as the cost of living is concerned. Any time there was something to be given away, any time there was any labour dispute, the hon. member has been Johnny on the spot.


Mr. Speaker:: Order. I see that the hon.
member for Winnipeg North Centre (Mr. Knowles) is in his seat. He has not objected to the remark, but I do not think the words "public enemy" should be applied to a member of this house.


John Sylvester Aloysius Sinnott: Then with your permission I will withdraw those words and say he would be contributor No. 1. I feel that justice is long overdue, and 1 am sure the minds and hearts of many Canadians would be filled with appreciation by a quick move on the part of the government to curb this terrible inflationary trend.
I believe that just criticism is always welcome, but when one criticizes he should be able to contribute to a solution of whatever he may be criticizing. I am sure nothing would be more satisfying to Joe Stalin and the communists in this country than to have the present trend continue. While we are not actually at war today, nevertheless our position is exactly the same as when subsidies were introduced during the last war. The very fact that a bill has been introduced at the present time to subsidize gold mining in 
Canada is evidence of that. Gold mining is an industry very essential to Canada's progress, and the hon. member for Cochrane (Mr. Bradette) ably presented his views in support of that bill. In the same way it is necessary at the present time to give essential foodstuffs some substantial support. I followed the Minister of Trade and Commerce (Mr. Howe) very carefully this evening. He did not disclose that he was opposed to subsidies, and I believe he was quite impressed that something had to be done in order to keep down the rising cost of food. I believe subsidies on the essential articles we require to keep our families alive must be provided immediately.
I know the government must be careful in the matter of subsidies; yet the mothers of large families, the wives of men in the lower income brackets, earning under $3,000 a year, need some assistance in making ends meet. Those with incomes of more than $3,000 a year can very well look after themselves. Things are very difficult also for those living on fixed incomes, and we need not go very far to find them. I could take any member of this cabinet to many places in the -city of Ottawa where people are finding it very difficult to feed their families. In my opinion subsidies must be provided for milk, bread, meat and the other bare essentials of life until such time as production catches up with consumption. There must also be control of the legitimate profits between the producer and the consumer, since many men in business today have been all set for overall price control. While I am not in favour of such over-all price control I believe subsidies on a few commodities such as I mentioned a moment ago are essential at the present time.
I have given what I think is the major reason for this inflationary trend. In conclusion I repeat that some way must be found to assure the farmers of this country that farm labour will be encouraged to remain on the land. Under our immigration policy of the past few years many immigrants have come into this country as farm labour. I do not think that policy has been rigidly followed up, because many of those immigrants remain on the farms only for a year or so and leave. It is not particularly nice to have an unwilling worker on the farm; still when a man comes here under a contract, I believe he should be kept to that contract. Many of those who have come here under this immigration policy have remained on the farm for only four or five months. Then they visit friends in the city, find out the wages they are making, and as a result leave the farms.

In my opinion subsidies on the essentials of food would be one of the finest security measures this government could take at the present time. I have presented my views, and I hope the government will take heed.
I do not intend to vote against them, because I believe they appreciate that there is unrest throughout the country because of the rising cost of living, and will take steps immediately to provide some relief.


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, I listened very carefully to the hon. member who preceded me, but I am still somewhat at a loss to appreciate just what was the urgent matter on which he wished to adjourn the house the other day. In the course of his remarks the hon. member referred to the adage, he who laughs last. While I think every hon. member of this house appreciates to the full the brand of humour to which the hon. member for Springfield (Mr. Sinnott) treats us on occasion, I should like to return to a more serious vein and say that this is no laughing matter to the housewives of this nation. Less than a month ago, speaking on approximately the same subject, I made this remark at page 1156 of Hansard for March 12:
May I draw to the attention of the house the fact that the heaviest single monthly increases in 1950 were in the months of March and July. We are already well into March; and while I am well aware that the figures that are reported are for the preceding month, I predict that the March report will follow the 1950 pattern, and probably the April one also.
I am now convinced that the April report is going to follow the same pattern. To arrive at that opinion it is only necessary to read the advertisements in the daily newspapers, notably those appearing on Thursdays when a great many retail houses run their full page ads to entice purchasers into their premises. Some of these prices, instead of attracting purchasers, would very nearly frighten them away. The most trying problem of this day for the average worker in this country is this very high cost of living. To those on the government side of the house charged with the responsibility of giving this country the leadership they were elected to provide, I would say that this matter cannot be cured by taking away the credit of the consumer. Nor can it be cured by taking away a still greater portion of his income through taxation, either direct or indirect, because already he has too little with which to purcnase the necessities of life. These actions merely aggravate an already complicated situation which has become a nightmare for the little man and his family.
Cost of Living
Apart from those who have some means of sustenance and perhaps the hope of augmenting their regular income through added employment there are those who have no such hope at all, including pensioners of many kinds. There are the old age pensioners, the blind, the veterans and their dependents, those trying to raise families on the mother's allowance, those trying to raise families on the proceeds of workmen's compensation where the breadwinner of the family has been lost. In every mail I receive letters from all over this country, from Victoria, from Saint John, New Brunswick, from Toronto, from the city of Ottawa and many from Hamilton. There is one from Beams-ville. I picked out a few of these, and I should like to read just a sentence from the various letters, because I believe they will express to this house more eloquently than I can possibly do the feelings of the people in this country on this very serious situation. Here is one referring to the old people:
These men and women who, through self-denial, have saved what some years ago would be enough for their needs in old age now find themselves facing poverty through wars and economical conditions beyond' their control-people with small fixed incomes, shelter and necessities rising, many of them are worried sick to know what to do.
Here is another one.
Is it possible to obtain a cost of living bonus for the old age pensioners . . .
Eloquent, is it not? Here is another:
May I bring to your attention the helplessness of our aged people? There is no union to help them as have the workers; the aged cannot go on strike. You know that $40 will not pay for rent, heat, clothing, food, etc.
Still another:
Old folks here agree that the present $40 is now not quite so good as the $20 we started with. The cost of food has more than doubled and rents have been raised three times. But it is a long time since pensions have been raised.
Here is another:
After spending a lifetime in the service of the C.N.R. got pensioned off with $25 a month to keep my wife and self.
Further in the same letter:
After thirty-three years' service, we have about 50 cents a week to live on after paying taxes, buying coal, electric and gas bills, with nothing left for clothes.
Here is another one:
How about those who are over eighty and cannot, like myself, do any work, must we starve? My wife was ill for seven years, the last four nearly blind and I could not do any work; had to look after her. From July 1, 1949, to August, 1950, when she died her expenses came to nearly $1,200.
Down further in the same letter:
I also had to sell all furniture and go into a boarding house and I pay $50 a month. I have $300

Cost of Living
left from furniture which I hope to save for my funeral (but I cannot do so). I have $450 to take me from now till November.
That was written on March 12, 1951. Here is another one:
Try as I might I cannot manage on what I am getting.
I am just picking out a sentence here and there which I think is pertinent, Mr. Speaker, to this discussion. Another one reads:
We are both up in years, in fact one over the eighty mark. Have had a lot of sickness and have a little left but cannot pay rent and have necessary food.
Here is still another:
We have been greatly concerned about so many refined old people who would never let the world know of their plight and yet they are living almost over the edge all the time.
Further in the same letter:
Old people who had enough to see them through life until costs became so outrageous . . .
I believe the leader of the opposition, in presenting his amendment today, referred to those who are too proud to ask for help, but who are suffering from malnutrition. There are many of them. I recall reading in the paper not long where an aged couple were found who had died from malnutrition.
Here is another letter:
My husband has been in business for sixty years. Has had to give up on account of health. We have had to spend thousands on doctors all our life. We have a little but can't pay rent and live.
Here is another:
I would be so pleased if you could help me in any way, and it would ease my mind about the near future, for even bare necessities run high by the end of the year these days. Fuel and taxes take the rent, and the little that is left goes on urgent repairs, and the home is getting old too, like myself.
Another one reads:
We do not ask for luxuries, but as prices are now how does the government think an aged person can get even the necessities of life out of $40 per month? Take room rent out, and what is left to live on for a month?
Mr. Speaker, I think those few-I may say I have probably twenty times as many in my office-excerpts from letters describe, more eloquently than any words anyone in this house could use, the plight of those who are on fixed incomes. Prices are still rising. The next index will undoubtedly show a still further increase. Where will it stop? We have listened tonight, Mr. Speaker, to theory; we have listened to explanations, and I think we have listened to excuses. I should like to leave this one word with this house. In the eyes of the women of Canada, those who are charged with feeding their families and
'Mrs. Fairclough.]
clothing their children, excuses will not feed those families nor will explanations clothe their children.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I just want to make a few brief remarks in connection with this most important subject. I must say it is always a pleasure for me to follow the member for Springfield (Mr. Sinnott). I love to listen to his pedestrian eloquence and his unusual philosophy. I thought this evening, Mr. Speaker, he made a masterly defence of continuing profits and static wages. I was much interested in his new economic philosophy- I think it was an economic philosophy which he advanced tonight. It concerned the question of subsidies being applied without increasing taxes. I wonder if the hon. member realizes that the moment you begin to apply subsidies you must have some control over the price of the product. At least I must give the member for Springfield credit for starting a new economic movement in Canada this evening. I was much interested, Mr. Speaker, while I sat here to listen to the Minister of Finance (Mr. Abbott) congratulating the member for Springfield on the excellent speech he had delivered this evening.
Mr. Speaker, I listened with great interest this evening to the remarks of the Minister of Trade and Commerce (Mr. Howe). I was glad to note that the government was concerned about the question of the rising cost of living. I believe it is the first time those remarks have been used by a government speaker in recent weeks in replying to questions posed by the increased cost of living. I believe, Mr. Speaker, we can safely conclude from the minister's remarks that the government is now getting seriously concerned about the increasing cost of living.
I listened to the Minister of Trade and Commerce with great interest because, as a matter of fact, he is one member of the cabinet who I believe speaks his mind, speaks bluntly and flatly. He said the government recognized the fact that inflation could undermine the foundations of society. I believe that is further evidence, Mr. Speaker, that the government is growing quite conscious of the demand of the Canadian people for some form of price control and subsidies, and of the increasing need for some form of price control and subsidies. The minister also mentioned that prices had increased ten per cent in the last ten months. That is an average increase of one per cent per month. If that continues for many more months, Mr. Speaker, we will certainly be approaching runaway inflation.
I do not think anyone would deny that it is because of the serious nature of the situation

today, because of the crying demand of the Canadian people for some action, that the opposition parties have taken the opportunity presented by the motion to go into supply to raise this question at this time.
Regardless of the statements made in the last two months by the Minister of Finance and by other spokesmen representing the government, as to the use of fiscal and monetary measures to combat inflation and as to the use of credit restrictions, it is obvious that those measures are insufficient. Like previous speakers, I would not for one moment suggest that price control is the complete answer to an extremely complicated and complex situation. But with prices rising as they are at the present time and the ineffectiveness to date of the government's methods, I think there is an indication that some further measure must be taken to regulate and control inflation of this economy.
To counter the arguments presented by government speakers, I think we cannot produce better evidence than the statements of members of the government themselves throughout the years in situations similar to this one. First of all, I am going to requote a statement that was mentioned this afternoon by the leader of the opposition and which I understood the Minister of Trade and Commerce to say that he concurred in today after the leader of the opposition had read it. On March 27, 1947, as reported at page 1813 of Hansard, the Minister of Trade and Commerce said:
The primary question that was asked of me was whether controls had hampered production. I can conscientiously say that since I have been associated with controls, which is from their inception, controls have never been permitted to hamper production.
There is a definite argument on the part of the minister against the suggestion that the imposition of controls would hamper production. The minister continued:
In fact, controls at the moment are greatly stimulating production in several important lines. In my opinion the over-all production today would not be improved by the immediate removal of controls. If the control of lumber were removed today -and lumber shows the greatest discrepancy between export and domestic prices of any commodity -I doubt if one additional tree would be cut. If the control of steel were removed, the over-all production of steel today would drop by at least twenty per cent. The reason is that under control we are able to take the surplus primary production from Sault Ste. Marie and move it to the finishing mills at Hamilton, Toronto and Montreal. We are able to bring billets from Sydney, Nova Scotia, something that is never done under ordinary conditions, and move them to Montreal and Hamilton and convert them into finished steel. Were this not possible, the over-all production of steel in this country would be at least twenty per cent less than it is at this moment.
Cost of Living
I think the minister was extremely correct in that statement, and I think conditions that prevailed after that statement was made proved it to be correct.
In addition to that, Mr. Speaker, I remember that on March 19, 1947 the present Minister of Fisheries (Mr. Mayhew), then parliamentary assistant to the Minister of Fisheries, made a radio broadcast-and I may say it was an excellent radio broadcast- which I quite well remember listening to. The minister took practically the whole period of that broadcast to indicate the beneficial effect that controls had had on the Canadian economy. The whole tenor of his remarks at that time was in support of the principle of controls and the benefits that the Canadian people had received from price control, subsidies and certain regulations that were necessary during that period.
I want also to refer to a statement by the former minister of finance, Right Hon. J. L. Ilsley, in the debate in March, 1947, on the emergency powers bill. I am just going to quote briefly what he said, as reported at page 1585 of Hansard of that year. During that debate the minister said:.
One can readily imagine how an abrupt and substantial rise in living costs would contribute to an unsettled state of industrial relations and to delays and interruption in the production of goods which are so eagerly demanded. It is not difficult to appreciate the hardship and the reduction in living standards that would result for the many families whose incomes are relatively fixed-wage-earners, school teachers, white-collar workers, pensioners, and so on.
Those are the very classes of people that the opposition have been, concerned about today and whose plight they have been presenting to the government.
That there would be profiteering and speculation in the necessities of life can be taken for granted. And it is an absolute certainty that many prices, after rising suddenly, would fluctuate widely, and later on decline perhaps as abruptly as they went up. To remove all controls now would be to ask for a sudden and disruptive jump in our prices and living costs at the very time when we can begin to see ahead of us the completion of the job of orderly readjustment. We would be throwing away many of the advantages of the policy which Canada has successfully followed when, with a little more persistence and a little more patience, we could pilot ourselves through the difficult period of readjustment without the dislocation and economic disorder which usually follows war.
If the government had only exercised a little more patience and had carried on those policies for a little longer period, in our opinion-that is, the opinion of the group to which I belong-we would not have entered the present condition of instability and insecurity.
On motion of Mr. Herridge the debate was adjourned.

Business of the House BUSINESS OF THE HOUSE


Alphonse Fournier: Tomorrow we wish to proceed with those two government notices of motions setting up the committees mentioned by them. I understand that some members are anxious that those committees should start their studies. Then we shall move to go into supply, or continue debate on this motion we have been discussing all day, with the amendment of the leader of the opposition

(Mr. Drew), hoping that we will get a vote before six o'clock. At eight o'clock the Minister of Finance (Mr. Abbott) will present his budget. Then the debate on the budget will be adjourned, I understand, for some time. We could then take up Bills No. 191 and No. 192 that are on the order paper.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, April 10, 1951